Section
247 Assignments
HUD
has special procedures for mortgage insurance claims on properties
located on Hawaiian Home Lands. Loans insured by HUD under Section
247 of the National Housing Act must be assigned to HUD at the time
an insured lender files its timely claim for mortgage insurance
benefits. A lender should consult 24 CFR §§203.439
and 203.665
for the special requirements which must be met prior to filing an
insurance claim for loans with the Automated Data Processing (ADP)
codes of 759, 780, 793, 805, 808 or 811 (last three digits of FHA
case number).
Filing
Claims
The
Section 247 program goal is to help the Department of Hawaiian Home
Lands (DHHL) in working with its native Hawaiian beneficiaries to
preserve their homes. Unlike other FHA single family programs, claims
can only be filed if all of the following conditions are met:
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After
written notification to DHHL of the mortgagor's default |
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After
the mortgagor's default remains uncured after six months |
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By
assignment of the insured mortgage and mortgage note to HUD. |
The
following information is intended to provide the lender with the
processing procedures for Section 247 Assignments.
Preconditions
of Filing an Insurance Claim
A
lender must determine that four (4) primary program requirements
are met before submitting a claim for insurance benefits:
- Mortgagor
was in default for 180 days or more.
- DHHL
was notified of mortgagor's default by letter at 90 days.
- Face-to-face
interview(s) was conducted with the defaulting mortgagor at least
30 days before the application for assignment is made, unless
this requirement is inapplicable under 24 CFR §203.604(c).
- Mortgagor
was properly evaluated for Loss Mitigation.
Processing
Procedures for Section 247 Assignments
An
FHA lender assigns the insured mortgage and note to HUD as part
of the claims process. See 24 CFR §203.350(c).
The Mortgage Note is conveyed by an authorized agent of the lender
signing the following endorsement on the original note: "All
right, title and interest of the undersigned to the within credit
instrument is hereby assigned to the Secretary of Housing and Urban
Development of Washington, D.C., his/her successors and assigns."
If the original note cannot be located, the lender should submit
a lost note affidavit.
Submitting
Title Evidence Package and Servicing Records
Be
sure to include a transmittal letter identifying a contact individual's
name and telephone number if HUD needs more information when submitting
claims, title evidence or servicing records. Guidance is available
from these sources:
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Consult
HUD Handbook 4330.4, Rev-1, FHA Single Family Insurance Claims,
for claim filing instructions. |
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Call
Gayle Ota, Single Family Program Specialist, in the Honolulu
Field Office at (808) 522-8190, ext. 228 if you are a lender
or servicer with questions about submitting servicing records. |
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Contact
Susan Lee, Chief Counsel, Honolulu Field Office, at (808) 522-8179,
ext. 258 if you have questions about the title evidence required
by HUD. |
At
the same time the lender files form HUD-27011, Parts A, B and D,
a request for title approval needs to be submitted with the title
evidence package to:
Chief
Counsel, Honolulu Office
U.S. Department of Housing and Urban Development
500 Ala Moana Blvd., Suite 3A
Honolulu, HI 96813
The
title evidence package must contain these key documents for title
approval:
- Original
Note endorsed to HUD in the format required by HUD-27011 A;
- Original
Mortgage, with evidence of recordation by DHHL;
- Recorded
Consent to Mortgage signed by DHHL;
- Recorded
intervening assignments of mortgage, if any;
- Recorded
Assignment of Mortgage (AOM) to HUD with required warranty;
- Copy
of mortgagor's Homestead Lease and recorded lease assignments
and amendments, if any; and
- Recorded
Mortgage Insurance Program Rider to the Homestead Lease.
In
addition to the title documents noted above, the following servicing
records should also be submitted:
- Copies
of HUD-27011-A, B and D;
- Copy
of Title Submission Certification;
- Proof
of request to endorse fire policy;
- Loan
history commencing from date of first payment;
- Copy
of signed management review checklist plus all supporting servicing
records;
- Initial
DHHL notification letter; and
- Evidence
of loss mitigation efforts.
Upon
satisfactory review of the above noted documents, the Honolulu Field
Office Counsel will issue a title approval letter to the submitting
lender and prepares, for execution by an authorized official of
the National Servicing Center (NSC), the conveyance documents to
transfer the loan from HUD to DHHL. NSC assures that the AOM from
HUD to DHHL is recorded and retains records of the Assignment.
Reconveyance
to Lender
If
HUD does not accept assignment of the mortgage and note, the loan
will be reassigned to the lender and a request for repayment of
the claim amount will be made. Alternatively, if the claim has yet
to be paid, the documents submitted will be returned to the lender.
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