Unless contravened by another federal or state statute or jurisdiction, FHA lenders must use the agency’s adjusted fair market value (AFMV) for all foreclosure sales and post-foreclosure sales associated with defaulted FHA loans, according to the FHA. The FHA said it issued guidance because more lenders are using FHA procedures regarding claims without conveyance of title. Before applying the AFMV, lenders must ensure that th loan’s FHA insurance is still active and that the loan is not subject to indemnification. Both items may be verified by checking Neighborhood Watch. Working with the borrower, the lender must make sure that all possible applicable home-retention and loss-mitigation options have been considered and explored before moving to an AFMV alternative. In addition, the lender must determine that the borrower’s case does not meet the criteria for a pre-foreclosure sale or deed-in-lieu of foreclosure. Mortgagees may not proceed with any foreclosure sale until ...