A revision is in process to HUD Handbook 4350.1, Chapter 14. Mortgagee Letter 2010-32 addresses and immediately implements several policy changes to Partial Payments of Claim (PPC) and Mortgage Modifications. This Mortgagee Letter complements Mortgagee Letter 87-9 which allows for the waiver of prepayment penalties and lockout provisions in mortgages to avoid a mortgage insurance claim. Properties approved for a PPC or mortgage modification are deemed to have complied with all terms of Mortgagee letter 87-9. For specific policy changes, please refer to Mortgagee Letter 2010-32.