Are there Anti-Fraud requirements for a Pre-Foreclosure Sale (PFS) transaction?

Yes, the following anti-fraud measures apply to Pre-Foreclosure Sale (PFS) transactions:
  • A Mortgagee must not approve a Borrower for a PFS if the Mortgagee knows or has reason to know of a Borrower’s fraud or misrepresentation of information.
  • All parties involved in a PFS transaction must sign and date a PFS Addendum as a contingency for a PFS transaction to close.
Anti-Fraud guidance is located in Handbook 4000.1 III.A.2.l.ii.(J)(1) at

Additional questions may be directed to the HUD National Servicing Center at (877) 622-8525.


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-04922