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Single Family Default Monitoring System (SFDMS) Frequently Asked Questions

QUESTION 1 - Where can I get information about Single Family Default Monitoring System (SFDMS) Error Codes and EDI reporting?

ANSWER -  Please visit  This page includes links to "Error Codes for HUD Default Reporting" and "Default Reporting Mechanics."

QUESTION 2 - How can we reduce duplication in reporting via EDI and FHA Connection?

ANSWER -When reporting via EDI or FHA Connection, ensure that information reported to FHA Connection is not duplicated in EDI or vice versa.  Reporting the same Status Codes for one loan to both systems will create duplication.  Ensure that the last Code reported at month end is the true status on the last day of the reporting period.  See ML 2006-15.

QUESTION 3 - The borrower is solicited for Loss Mitigation before foreclosure referral, but does not submit appropriate financial documentation or does not qualify for Loss Mitigation due to a lack of income.  The Lender transmits an AO code (Ineligible for Loss Mitigation). After referral to foreclosure, the borrower submits the required documentation or experiences an increase in income that would make him/her eligible for a Loss Mitigation Option. In this scenario, would Status Codes 09 (Special Forbearance), 10 (Partial Claim Started), and 28 (Modification Started), be invalid Status Codes after reporting an AO?

ANSWER - No.  The scenario as presented is not rare; HUD would not consider the reporting of these codes in this manner as illogical.  See ML 2006-15.

QUESTION 4 - When a third party sale occurs, should a lender report Status Code 1A (Foreclosure Sale Held) in addition to the Status Code 30 (Third Party Sale)?

ANSWER - No. When reporting Preforeclosure Sales, Status Codes 1A(Foreclosure Sale Held) and 46 (Property Conveyed to Insurer) are not required; The use of Status Code 30 (Third Party Sale) negates the need for those Codes.  See ML 2006-15.

QUESTION 5 - Current loans in Bankruptcy Status should not be reported to SFDMS; however, a servicer continues to report these loans and receive errors. Is there a way for SFDMS to exclude these loans from reporting? 

ANSWER - No.  SFDMS is a default reporting system for reporting delinquent loans that are due for one full installment (30 days delinquent), and SFDMS will reject any case with a status that does not open with Status Code 42 (Delinquent).  SFDMS returns errors when current loans are reported with bankruptcy Status Codes.  Your Servicer needs to alter their reporting to exclude those loans.  See ML 2006-15.

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