Servicing Guide

Published December 12, 2018

E-4.5-03: Filing MI Claims for FHA Coinsured Mortgage Loans (11/12/2014)

After the foreclosure sale of an FHA coinsured mortgage loan, FHA expects the servicer to try to sell the property. However, Fannie Mae will assume the responsibility for marketing the property. If the property is not sold within six months after the foreclosure sale, the servicer must notify FHA. Procedures for filing MI claims will vary based on whether Fannie Mae is able to sell the property within the six month time frame allotted by FHA. The servicer must follow the applicable procedure in either Filing a Claim for an Unsold FHA Coinsured Property or Filing a Claim for an FHA Coinsured Property that Fannie Mae Sold, in F-1-06, Filing an MI Claim for a Liquidated Mortgage Loan or Acquired Property.

As soon as the servicer receives the FHA claim settlement, it must remit the full amount it owes Fannie Mae. If the payment is not sent to Fannie Mae within 15 days after it is received, Fannie Mae may impose a daily interest charge until it receives it.

The interest charge will be calculated at the prime rate (as published in The Wall Street Journal’s prime rate index) that was in effect on the first business day of the month in which FHA transferred the funds to the servicer, plus 3%.

The servicer must reimburse Fannie Mae for any amount that FHA disallows from the claim because of the servicer’s failure to comply with FHA’s requirements.

The following table indicates the breakdown of the amount due to Fannie Mae depending on whether or not the property was sold.

If the property... The servicer’s payment to Fannie Mae will represent...

was sold and Fannie Mae has the sales proceeds in its possession

  • the remaining UPB,

  • debenture and mortgage loan interest included in FHA’s settlement, and

  • two-thirds of the foreclosure costs.

was not sold within the allowable six months resulting in a claim settlement based on the appraised value of the property

  • the entire amount of the outstanding principal balance,

  • debenture and mortgage loan interest included in FHA’s settlement, and

  • two-thirds of the foreclosure costs.