Laws & Regs

§ 203.350

24 CFR Ch. II (4–1–06 Edition)

excluded in computing the period within which the mortgagee shall commence foreclosure or acquire the property by other means as provided in
§ 203.355 of this subpart. No postponement or delay in the prosecution of
foreclosure proceedings during the period the mortgagor is in such military
service shall be construed as failure on
the part of the mortgagee to exercise
reasonable diligence in prosecuting
such proceedings to completion as required by this subpart.
[36 FR 24508, Dec. 22, 1971, as amended at 61
FR 36265, July 9, 1996]

ASSIGNMENT OF MORTGAGE
§ 203.350 Assignment of mortgage.
(a) Assignment of modified mortgages
pursuant to section 230, National Housing
Act. HUD may accept an assignment of
any mortgage covering a one-to-four
family residence if the following requirements are met:
(1) The mortgage was in default;
(2) The mortgagee has modified the
mortgage under § 203.616 to cure the default and to provide for mortgage payments within the reasonable ability of
the mortgagor to pay, at an interest
rate not exceeding current market interest rates; and
(3) Such other conditions that HUD
may prescribe, which may include the
requirement that the mortgagee continue to be responsible for servicing
the mortgage.
(b) Assignments pursuant to section 248,
National Housing Act. Notwithstanding
the provisions of paragraph (a), the
Commissioner shall, upon application
by the mortgagee, approve the assignment to the Commissioner of any
mortgage insured pursuant to section
248 of the National Housing Act (see
§ 203.43h) where the mortgagor has been
in default for more than 90 days. The
mortgagee may not request the Commissioner to accept an assignment
until the mortgagee has submitted documents to the Commissioner showing
that the requirements of § 203.604 have
been met. HUD shall then notify the
mortgagee of its approval of the mortgagee’s actions under § 203.604 and that
the mortgagee may assign the mortgage to the Secretary, or HUD will
specify what further action the mort-

gagee must take to meet the requirements of § 203.604.
(c) Assignment of mortgages insured
pursuant to section 247, National Housing
Act. Notwithstanding the provisions of
paragraph (a) of this section, the Secretary will, upon application by the
mortgagee, agree to accept an assignment of any mortgage insured pursuant to section 247 of the National Housing Act (§ 203.43i of this part) where the
mortgagor has been in default for more
than 180 days, provided that the requirements of § 203.665 are satisfied.
(d) Assignment of mortgages authorized
by section 203(q), National Housing Act.
Notwithstanding the provisions of
paragraph (a) of this section, the Secretary will, upon application by the
mortgagee, agree to accept assignment
of any mortgage authorized by section
203(q) of the National Housing Act
(§ 203.43j of this part) if
(1) The mortgagor has been in default
for more than 90 days for failure to
make a monthly payment,
(2) The requirements of § 203.666 are
satisfied, and
(3) The date of default occurs before
the mortgagor and the lessor execute a
lease renewal or a new lease with a
term of not less than five years beyond
the maturity date of the mortgage, or
with a term established by an arbitration award.
If the default is non-monetary, the
date of default occurs prior to an action described in paragraph (d)(3) of
this section, the requirements of
§ 203.666 are satisfied, and the mortgagor has been in default for more than
30 days, the Secretary may in his or
her discretion, upon application by the
mortgagee, agree to accept an assignment of the mortgage. If the leasehold
estate has terminated before the mortgage has been assigned, or title to the
property conveyed, to the Secretary,
and the mortgage is in default for any
reason for more than 30 days, the Secretary will, upon application by the
mortgagee, agree to accept an assignment of the mortgage.
(e) Filing assignment for record. Within
30 days of the Secretary’s written
agreement to accept assignment of a

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Office of Assistant Secretary for Housing, HUD
defaulted mortgage, or within such additional time as the Secretary authorizes in writing, the mortgagee must file
the assignment for record.
(Information collection requirements in
paragraph (b) were approved by the Office of
Management and Budget under control number 2502–0169)
[51 FR 21872, June 16, 1986, as amended at 52
FR 48202, Dec. 21, 1987; 53 FR 9869, Mar. 28,
1988; 53 FR 13404, Apr. 25, 1988; 55 FR 282, Jan.
4, 1980; 61 FR 35018, July 3, 1996]

§ 203.351 Application for insurance
benefits and fiscal data.
On the date the assignment of the
mortgage is filed for record, the mortgagee shall forward to the Commissioner the prescribed application for
insurance benefits and fiscal data pertaining to the mortgage transaction,
together with the receipts covering all
disbursements, as required by the fiscal
data form. In addition, the following
requirements shall be met:
(a) Items to be included with application. The following items shall be forwarded to the Commissioner with the
application:
(1) Credit and security instrument. The
original credit and security instruments assigned without recourse or
warranty, except that no act or omission of the mortgagee shall have impaired the validity and priority of the
mortgage.
(2) Recorded assignment instrument.
The original of the recorded assignment of mortgage. If the original of the
assignment is not available, a copy
shall be furnished and the original forwarded as soon as possible.
(3) Hazard insurance. All hazard insurance policies held in connection
with the mortgaged property, together
with a copy of the mortgagee’s notification to the carrier authorizing the
amendment of the loss payable clause
substituting the Commissioner as the
mortgagee.
(4) Rights and interests. An assignment of all rights and interests arising
under the mortgage, and all claims of
the mortgagee against the mortgagor
or others arising out of the mortgage
transaction.
(5) Property. All property of the mortgagor held by the mortgagee or to
which it is entitled (other than the

§ 203.355

cash items which are to be retained by
the mortgagee).
(6) Records and accounts. All records,
ledger cards, documents, books, papers
and accounts relating to the mortgage
transaction.
(7) Additional information. Any additional information or data which the
Commissioner may require.
(8) Title evidence. All title evidence
held by the mortgagee. It need not be
extended to include the recordation of
the assignment. If a mortgagee’s title
policy is furnished, the Commissioner
shall be a named insured under such
policy.
(b) Items to be retained by mortgagee.
The mortgagee shall retain all cash
amounts held or deposited for the account of the mortgagor or to which it
is entitled under the mortgage transaction that have not been applied in reduction of the principal mortgage indebtedness.
(c) Title evidence for mortgages insured under § 203.43d as set forth in
§ 203.385 shall accompany the application for insurance benefits.
[36 FR 24508, Dec. 22, 1971, as amended at 37
FR 7693, Apr. 10, 1972; 42 FR 57435, Nov. 2,
1977]

§ 203.353 Certification by mortgagee.
At the time of assignment of the
mortgage, the mortgagee shall certify
to the Commissioner that:
(a) Priority of mortgage to liens. The
mortgage is prior to all mechanics’ and
materialmen’s liens filed of record, regardless of when such liens attach, and
prior to all liens and encumbrances, or
defects which may arise except such
liens or other matters as may have
been approved by the Commissioner;
(b) Amount due. The amount stated in
the instrument of assignment is actually due and owing under the mortgage;
(c) Offsets or counterclaims. There are
no offsets or counterclaims thereto and
the mortgagee has a good right to assign.
CLAIM PROCEDURE
§ 203.355 Acquisition of property.
(a) In general. Upon default of a mortgage, except as provided in paragraphs
(b) through (i) of this section, the

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