GENERAL REQUIREMENTS FOR PROPERTY AND PRESERVATION OF PROPERTIES SECURED BY FHA INSURED MORTGAGES
Claim Submission and Documentation
HUD will reimburse mortgagees for P&P actions in accordance with the provisions of this Mortgagee Letter, upon receipt of Form HUD-27011 Parts A & B. For instructions on claim processing and document submission, see HUD Handbook 4330.4, REV-1, “FHA Single Family Insurance Claims” (http://www.hud.gov/offices/adm/hudclips/handbooks/hsgh/4330.4/index.cfm).
Documentation including photographs to support each P &P claimed expense shall be provided to the MCM through the web-based P260 portal, upon submission of the claim for insurance benefits request. The documentation must support the expenditures and provide a verifiable timeline that demonstrates the mortgagee took prudent actions to preserve and protect the property until its conveyance. The MCM will audit all claims filed under HUD Form 27011 parts B-D to evaluate the charges against Exhibit B of this Mortgagee Letter and ensure that the Department was not overcharged. The MCM will evaluate the cost of the preservation and protection work performed using an industry standard cost estimator.
HUD will require the repayment of reimbursements if it determines that:
- Amounts paid for reimbursement were unnecessary or excessive; or Services claimed were not performed or not performed properly
- To claim reimbursement, all P&P actions shall meet the guidelines as provided in 24 CFR § 203.377 through 24 CFR § 203.381, the guidance provided in this Mortgagee Letter and any subsequent guidance as directed by HUD.
- Mortgagees are prohibited from performing or claiming P&P services after the deed has been recorded. However, payment of certain utility bills may be considered an exception to this guideline. Reimbursable costs are outlined on the attached Exhibit B, “Maximum Property Preservation Allowance” chart.