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Amount of payment-conveyed and non-conveyed properties. 


Directive Number: 203.401 


 
(a) Conveyed properties. Where a claim for the insurance
    benefits is filed in accordance with this subpart, based on the
    conveyance of title to the mortgaged property to the Commissioner, the
    amount of the insurance benefits shall be computed by adding to the
    original principal balance of the mortgage (as increased by the amount of
    open-end advances made by the mortgagee and approved by the Commissioner)
    which was unpaid on the date of the institution of foreclosure
    proceedings, on the date of the acquisition of the property otherwise
    after default, or on the date the property was acquired by the
    Commissioner under a direct conveyance by the mortgagor, the amount of
    all payments made by the mortgagee and allowances for items set forth in
    Sec. 203.402, less all applicable items set forth in Sec. 203.403.
 
(b) Claims without conveyance of title. (1) If the mortgagee
    acquires title to the mortgaged property pursuant to a bid amount equal
    to the Commissioner's adjusted fair market value and the mortgagee elects
    to retain title as provided in Sec. 203.368(g)(2), or if the mortgagee
    acquires title pursuant to a bid in excess of the Commissioner's
    adjusted fair market value (see Sec. 203.368(g)(4)), the
    amount of the insurance benefits shall be determined
    by deducting the amount bid at the sale from the original principal
    balance of the mortgage (as increased by the amount of open-end
    advances made by the mortgagee and approved by the Commissioner) which
    was unpaid on the date of institution of the foreclosure proceedings, and
    adding to the difference, if any, all applicable items set forth in
    Sec. 203.402 and subtracting therefrom all applicable items set forth
    in Sec. 203.403; provided however, that appropriate adjustment
    shall be made for any such items covered by proceeds of the foreclosure
    sale.
 
(2) If a party other than the mortgagee acquires title to the
mortgaged property pursuant to a bid at foreclosure sale not less in
amount than the Commissioner's adjusted fair market value, the amount of
the insurance benefits shall be determined by deducting the proceeds of
the foreclosure sale distributed to the mortgagee from the original
principal balance of the mortgage (as increased by the amount of open-end
advances made by the mortgagee and approved by the Commissioner) which
was unpaid on the date of the foreclosure proceedings, and adding to the
difference, if any, all applicable items set forth in
Sec. 203.402 and subtracting therefrom all applicable items set
forth in Sec. 203.403; provided, however, that appropriate
adjustment shall be made for any such items covered by the proceeds of
the foreclosure sale.
 
(3) If the mortgagee acquires title to the mortgaged property
pursuant to a bid not less in amount than the Commissioner's adjusted
fair market value, and the mortgagor or another party redeems the
property, the amount of the insurance benefits shall be determined by
deducting the amount paid to redeem the property and received by the
mortgagee from the original principal balance of that mortgage (as
increased by the amount of open-end advances made by the mortgagee and
approved by the Commissioner) which was unpaid on the date of the
institution of foreclosure proceedings, and adding to the difference, if
any, all applicable items set forth in Sec. 203.402 and
subtracting therefrom all applicable items set forth in
Sec. 203.403; provided however, that appropriate adjustments
shall be made for any such items covered by that amount paid by the
mortgagor or other party to redeem the property.
 
(c) Pre-foreclosure Sales. Where a claim for insurance benefits
    is filed in accordance with this subpart, based on a pre-foreclosure sale
    approved by or on behalf of the Secretary (under the provisions of
    Sec. 203.370), the amount of insurance benefits shall be computed
    by adding to the original principal balance of the mortgage (as
    increased by the amount of open-end advances made by the mortgagee and
    approved by the Commissioner) which was unpaid on the date of
    closing of the pre-foreclosure sale, the amount of all applicable items
    set forth in Sec. 203.402; provided however that appropriate
    adjustment shall be made for any such items covered by proceeds of the
    pre-foreclosure sale.
 
(d) Final Payment. (1) The mortgagee may not file for any
additional payments of its mortgage insurance claim after six months from
payment by the Commissioner of the final payment except for:
 
(i) Cases where the Commissioner requests or requires a deficiency
judgment.
 
(ii) Other cases where the Commissioner determines it appropriate and
expressly authorizes an extension of time.
 
(2) For the purpose of this section, the term final payment
shall mean, in the case of claims filed for conveyed properties, the
payment under subpart B of this part which is made by the Commissioner
based upon the submission by the mortgagee of all required documents and
information filed pursuant to Sec. 203.365. In the case of
claims filed under claims without conveyance of title, final
payment shall mean the payment which is made by the Commissioner based
upon submission by the mortgagee of all required documents and
information filed pursuant to Secs.  203.368 and
203.401(b). In the case of claims filed pursuant to pre-foreclosure
sales, final payment shall mean the payment which is made by the
Commissioner based upon submission by the mortgagee of all required
documents and information filed pursuant to Secs.  203.370
and 203.401(d).
 
[52 FR 1328, Jan. 13, 1987, as amended at 56 FR 3215, Jan. 29,
1991; 59 FR 50144, Sept. 30, 1994]



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