For what reasons may HUD reconvey a property back to a Mortgagee?

A Reconveyance is a conveyance of a Property from HUD back to the Mortgagee due to the Mortgagee’s failure to comply with HUD’s conveyance requirements.
 
If a Mortgagee fails to comply with HUD’s conveyance requirements, HUD may:
  • Reconvey title to the Mortgagee;
  • cancel the Mortgagee’s claim for insurance benefits; and
  • request reimbursement for expenses incurred for acquisition, holding and Reconveyance, less any income received from the Property, from the date the deed to HUD was filed for record to the date of Reconveyance.  
The Mortgagee may reapply for insurance benefits.
 
Additional questions may be directed to the HUD National Servicing Center at (877) 622-8525.

For policy information see Handbook 4000.1 Section  III.A.2.t.ix. available at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-04524