IV.A.1.a. Preparation and Submission of Claims (09/30/16)

Owned by Kacey Olson
Nov 25, 2018
6 min read

© HUD Single Family Housing Policy Handbook 4000.1

Included in this section are:

i. Who Can Submit Claims

ii. Liability for Claims Filed

iii. FHA Case Number

iv. Insured Mortgages

v. Borrower’s Social Security Number

vi. Form HUD-27011, Single Family Application for Insurance Benefits

vii. Methods of Submission of Claims

i. Who Can Submit Claims

The holding Mortgagee or the servicing Mortgagee must submit the claim. While authorized parties may prepare or submit the claim on behalf of the Mortgagee, HUD will only pay the claim as stated in Disbursement of Claim.

ii. Liability for Claims Filed

Mortgagees are liable for the contents of any claims filed. By submitting a claim, whether electronically or by paper, the Mortgagee certifies that the statements and information contained in the claim are true and correct.

HUD will prosecute false claims and statements and Mortgagees may be subject to criminal and/or civil penalties or other action.

iii. FHA Case Number

The Mortgagee must ensure that the FHA case number is on all pages of form HUD-27011, Single Family Application for Insurance Benefits, and on the cover page of any claims correspondence and documents sent to the Mortgagee Compliance Manager (MCM) and HUD.

iv. Insured Mortgages

The Mortgagee may only submit a claim for a Mortgage that is insured by FHA.

v. Borrower’s Social Security Number

(A) Mortgages for which an Application for a Firm Commitment was Signed On or After August 14, 1986The Mortgagee must include at least one of the Borrowers’ Social Security Numbers (SSN) in Item 33 of Part A on all claim forms for Mortgages for which an application for a Firm Commitment was signed on or after August 14, 1986.If additional space is needed, the Mortgagee may enter the co-Borrowers’ SSNs in the “Mortgagee’s comments” section.

(B) Mortgages for which an Application for a Firm Commitment was Signed Before August 14, 1986

(1) Standard Where the application for a Firm Commitment was signed before August 14, 1986, the Mortgagee may submit a claim form without a Borrower’s SSN if:

  • the Mortgagee has made the annual requests for the Borrower’s SSN, as required by the Internal Revenue Service (IRS), but the Borrower has failed to provide the requested SSN;
  • the Mortgagee has made an exhaustive search of all available records and cannot find the Borrower’s SSN; or
  • the Borrower is deceased or cannot be located to provide the missing SSN.

(2) Required Documentation To submit the claim form without the Borrower’s SSN, the Mortgagee must:

  • attach to the claim a signed certification or include in the “Mortgagee’s comments” section the following language: “I certify that no social security number is available for FHA Case Number ___, upon which this claim is based. I further certify that I or representatives of my company have searched for all available records and made all annual requests for the Borrower’s social security number that are required by the IRS;” and
  • detail in the “Mortgagee’s comments” section the Mortgagee’s efforts in attempting to obtain the Borrower’s SSN.

vi. Form HUD-27011, Single Family Application for Insurance Benefits

The Mortgagee must use form HUD-27011 to submit a claim for insurance benefits. Form HUD-27011 consists of the following five parts. See the Claim Filing Technical Guide for detailed information on completing this form.

(A) Part A – Initial Application The Mortgagee must submit initial case data through Part A for each claim. Part A includes information relating to the Mortgage, Property, property condition, Mortgagee, payment history, and the foreclosure or, if appropriate, the assignment or Pre-Foreclosure Sale (PFS).

(B) Part B – Fiscal Data The Mortgagee must submit fiscal data related to allowable expenses and accrued interest through Part B for each claim. Part B provides all summary information relating to receipts and disbursements incurred by the Mortgagee that affect the amount of insurance claim. For all claims other than conveyance claims, the Mortgagee must submit Part B simultaneously with Part A.

(C) Part C – Support Document Part C contains itemized information relating to disbursements for the Property Preservation and Protection (P&P). Where applicable, the Mortgagee must prepare this document prior to completion of Part B.

(D) Part D – Support Document (Continuation 1)Part D contains itemized information relating to such items as taxes, hazard insurance premiums, Mortgage Insurance Premiums (MIP), foreclosure costs, and acquisition fees and costs, and bankruptcy fees and costs. Where applicable, the Mortgagee must prepare this document prior to completion of Part B.

(E) Part E – Support Document (Continuation 2)Part E contains itemized information relating to closing costs and amounts due from and to the buyer at closing. The Mortgagee must prepare Part E:

  • for PFS and Claims Without Conveyance of Title (CWCOT) claims; and
  • when claiming appraisal and deficiency Judgment costs actually incurred by the Mortgagee and permitted or directed by HUD, on conveyance claims.

Where applicable, the Mortgagee must prepare this document prior to completion of Part B.

vii. Methods of Submission of Claims

Mortgagees must use one of the following methods to file claims.

(A) Electronic Data Interchange

(1) Definition The Electronic Data Interchange (EDI) is an online system for Mortgagees to electronically file claims.

(2) Standard The Mortgagee may submit claims via EDI for all claims other than Loss Mitigation Home Retention incentive claims and supplemental claims.

(3) EDI Technical Guidance The Mortgagee may find information on using EDI in HUD’s EDI Implementation Guide.

(4) Application Advice and Error Correction The Mortgagee may identify errors in their submissions by reviewing Transaction Set (TS) 824. The Mortgagee must take necessary corrective action, including correction or submission of documentation, within 60 Days of the generation of TS 824 to avoid deletion of its EDI claim.

(B) FHA Connection

(1) Definition FHA Connection (FHAC) is an online system for Mortgagees to access and communicate to HUD origination, servicing, and mortgagee approval and recertification information.

(2) Standard The Mortgagee may submit claims via FHAC for conveyances, Loss Mitigation Home Retention Option incentives, CWCOT, and PFS claims. The Mortgagee may not use FHAC for filing Single Family Loan Sale (SFLS) claims, Property located on Indian Land claims, Hawaiian Home Land claims, and supplemental claims. The Mortgagee must enter and submit claims individually; the submitted claims will be batched and loaded nightly into the HUD Claims system for processing the next business day.

(3) FHAC Technical Guidance The Mortgagee may find information on using FHAC in HUD’s FHA Connection Guide.

(4) Transmission Confirmation The Mortgagee must include a copy of the Single Family Insurance System (SFIS) Claims Input Result screen in the Claim Review File. This screen appears when the claim has been successfully transmitted and will show the claim detail and receipt date.

(5) Error Correction The Mortgagee must review its claim status via FHAC to determine whether a claim has been suspended and in need of correction or documentation. The Mortgagee must take necessary corrective action, including correction or submission of documentation, within 60 Days of the suspension to avoid deletion of its claim submission.

(6) Mortgagee Contact Information The Mortgagee must include a staff member contact name and phone number in all claims submitted via FHAC. Alternatively, the Mortgagee may enter the name of a department or functional area that can be contacted regarding FHAC submissions.

(C) Paper Submission Process

(1) Definition A Paper Claim is a hard copy of form HUD-27011 or equivalent that is mailed to HUD for processing of a claim for mortgage insurance benefits.

(2) Standard The Mortgagee may submit paper claims for all claims other than Loss Mitigation Home Retention incentive claims and SFLS claims, where disallowed by the Participating Servicer Agreement (PSA).The Mortgagee may use a computer-generated form or facsimile to submit a paper claim only if it is substantially identical to the form HUD-27011 in size and format.

(3) HUD Processing Fee HUD will assess a $100 processing fee for each Part A and B of form HUD-27011 filed as a paper claim, with the exception of:

  • supplemental claims;
  • claims for Mortgages insured under Section 247 (Hawaiian Home Lands) or Section 248 (Insured Mortgages on Indian Land); and
  • reacquisition packages.

(4) Certification of Claim Accuracy The Mortgagee must ensure that the paper claim form is signed by an authorized Mortgagee official (authorized agent). By signing the form HUD-27011, the authorized Mortgagee official is certifying that all information and statements contained in the claim are true and correct. HUD will return the claim submission to the Mortgagee if it is not signed or if it contains a stamped, illegible, or duplicated signature.

(5) Electronic Signatures The use of electronic signatures is voluntary. HUD will accept an electronic signature conducted in accordance with the Policy on Use of Electronic Signatures on claim documents requiring signatures, unless otherwise prohibited by law.

(6) Submission of the Initial Paper Claim The Mortgagee must send via mail or courier the original form HUD-27011 Parts A, B, C, D, and/or E with required attachments to:

  • S. Department of Housing and Urban Development
    Single Family Claims Branch
    Attn: Claim Reviewer
    Room 6251
    451 7thStreet, SW
    Washington, DC 20410

The Mortgagee may request information regarding its HUD-designated Claim Reviewer by emailing Fha_Sfclaims@hud.gov.

(7) Pre-Screening

(a) Definition Pre-Screening of Claims is the process by which HUD reviews paper claim packages before processing to determine whether any data is missing or incomplete.

(b) Standard If any discrepancies or deficiencies are found, HUD ceases its review of the claim and will return the unprocessed claim to the Mortgagee. HUD considers the official receipt date of the paper claim to be the date that HUD receives a claim that passes pre-screening.