Mortgagee Responsibility

Mortgagee Responsibility

Mortgagees shall preserve and protect foreclosed properties that were secured by FHA-insured mortgages as required by 24 CFR § 203.377 through § 203.381 and 24 CFR § 234.270. The decision as to what action to take to preserve and protect the property is the mortgagee‟s responsibility and is independent of the amount that HUD reimburses. If a property that was secured by an FHA-insured mortgage is conveyed with damage to the Secretary without prior approval, the Department may reconvey the property or require a reduction to the claim for insurance benefits, for the greater of the hazard insurance recovery or HUD‟s estimate of the cost of repairing the damage.