Must a Mortgagee accept a partial payment on an FHA performing mortgage?

A Partial Payment is a payment of any amount less than the full amount due under the Mortgage at the time the payment is tendered, including Late Charges and amounts advanced by the Mortgagee on behalf of the Borrower.
 
For performing Mortgages, the Mortgagee may return any Partial Payment to the Borrower with a letter of explanation.
 
The Mortgagee must note in its servicing file any Partial Payments received and, if applicable, documentation on the date the payment was returned with a letter of explanation.

Additional questions may be directed to the HUD National Servicing Center at (877) 622-8525.
 
For policy information see Handbook 4000.1 III.A.1.e.iii. 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-05217