When a borrower sells the property but the sales proceeds are insufficient to satisfy the mortgage, a Mortgagee may file a HECM Claim Type 23 (Borrower’s Short Sale) provided that either:
- the loan was not due and payable and the property was sold for at least the current appraised value; or
- the loan was due and payable and the property was sold for at least 95% of the current appraised value.
For more information see Mortgagee Letter 15-10 available at https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee
Any additional questions may be directed to the FHA Resource Center at Toll-Free (800) CALLFHA (225-5342) or by email to email@example.com. Persons with hearing or speech impairments may reach this number by calling the Federal Information Relay Service at (800) 877-8339.