Assumptions - Assumption of an FHA-insured mortgage is a servicing function where the responsibility or paying for a mortgage is taken over by another person through simple assumption or creditworthiness assumption.

Claims - The vehicle utilized for payment of insurance proceeds from HUD to a Lender is the Insurance Benefit Claim form HUD- 27011. This form is utilized for all submissions of Claims for Conveyance of Property and Loss Mitigation Option Incentives.

Deed-in-Lieu - A Deed in Lieu of foreclosure (DIL) is a Disposition Option in which a Borrower voluntarily deeds collateral property in exchange for a release from all obligations under the mortgage. A DIL of foreclosure may not be accepted from Borrowers who can financially make their mortgage payments. DIL Fact Sheet

Extension of Time - To comply with required time frames, an Extension of Time is a tool afforded to Lenders to assist in the initiation or completion of HUD's Loss Mitigation Program (except Preforeclosure Sales) and/or foreclosure action. A Lender is required to submit to NSC-Oklahoma City, form HUD-50012, Mortgagee's Request for Extensions of Time, prior to the expiration of the respective time frame via   Extensions and Variances Automated Requests System (EVARS).

FHA Connection - FHA Connection (FHAC) is an online portal used by Lenders to report on and update the status of their respective FHA portfolios. In addition, the FHAC facilitates the following Single Family Servicing functions: Claims Processing, Delinquent Loans, HECM Reports, Monthly Premiums, Mortgage Record Changes, Mortgage Calculator, Mortgage Servicing Data Quality System and Lender Query by Case Number. For additional information about FHA Connection, log onto FHAC FAQs.

FHA-HAMP - FHA-HAMP provides Borrowers who are in default and/or in imminent default a greater opportunity to retain homeownership using a Partial Claim combined with a Loan Modification.  See Mortgagee Letter 09-23, the  Questions and Answers document, and the FHA-HAMP Fact Sheet.

Foreclosure - Foreclosure should only be considered as a last resort and should not be initiated until all Loss Mitigation Options have been exhausted. When foreclosure cannot be avoided, it must be started quickly and prosecuted vigorously to minimize losses to both the Lender and HUD.

General Loss Mitigation - This category includes all Loss Mitigation questions that are not specific to one of the Loss Mitigation Options.

General Servicing - This category includes all General Servicing items stated within HUD Handbook 4330.1 REV-5, Administration of Insured Home Mortgages.

Loan Modification - A Loan Modification is a permanent change in one or more of the terms of a Borrower's loan, allows the loan to be reinstated, and results in a payment the Borrower can afford. Loan Modification Fact Sheet

Partial Claim - Under the Partial Claim Option, the Lender will advance funds on behalf of the Borrower in an amount necessary to reinstate the delinquent loan (not to exceed the equivalent of 12 months PITI). The Borrower will execute a Promissory Note and Subordinate Mortgage payable to HUD. Currently, these Promissory or "Partial Claim" Notes assess no interest and are not due and payable until the Borrower either pays off the first mortgage or no longer owns the property. Partial Claim Fact Sheet

Preforeclosure Sale - The Preforeclosure Sale (PFS) Program allows the defaulted Borrower to sell his/her home and use the Net Sale Proceeds to satisfy the mortgage debt even though these Proceeds are less than the amount owed. Preforeclosure Sale Fact Sheet. NOTE - NSC and the Post Claims Division have developed a listing of PFS Allowable and Disallowable fees. If the fee the Lender wants to verify is not on the list, the Lender will need to submit a Variance via HUD's EVARS System.

Single Family Default Monitoring System - Data reported to the Single Family Default Monitoring System (SFDMS) is used to measure the effectiveness of origination and servicing activities, and the potential risk to HUD's Insurance Fund.  SFDMS Fact Sheet

Special Forbearance - A Special Forbearance (SFB) is a written repayment agreement between a Lender and a Borrower, which contains a plan to reinstate an asset. Special Forbearance Fact Sheet.  Mortgagee Letter 2011-23 -Unemployment SFB Type 1 FAQs.  Mortgagee Letter 2011-28 Trial Payment Plan FAQs.

Variance - A Lender is required to submit form HUD-90041, Request for Variance Procedure on any Loss Mitigation Option where all HUD requirements have not been met. These Variances are to be submitted via Extension and Variance Automated Requests System (EVARS). All Variances are considered on a case-by-case basis. When preparing a Variance for Special Forbearance, Trial Payment Plan, Loan Modification, Partial Claim or Deed-in-Lieu, the Lender is to select "other button". When preparing a Variance for the Preforeclosure Sale Program and FHA-HAMP Option, the Lender is to utilize the drop down menu and select the appropriate choice.