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U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, D. C. 20410-8000

February 2, 1987
OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER
Mortgagee Letter 87-6
      TO:  ALL APPROVED MORTGAGEES
      SUBJECT:  Single Family Development - Streamlined Refund
                  Process for Refinance Transactions
 
           Mortgagee Letter 86-9  provided a Form HUD-27034, Request
      for Refund of One-Time Mortgage Insurance Premium (OTMIP), for
      use in expediting refunds of OTMIP involving FHA refinancing
      transactions.  The Form HUD-27034 contains two payment options:
      (1) payment direct to the homeowner or (2) payment jointly to
      the mortgagor and refinancing mortgagee with the check mailed
      to the mortgagee.  We are expanding the payment options to
      permit the mortgagor-borrower to authorize HUD to pay the
      refund solely to the refinancing mortgage lender.  This will
      permit lenders to advance the funds representing the
      forthcoming OTMIP refund to the mortgagor-borrower and provide
      a means for the lender to assure repayment.
 
           To use the new option, the refinancing mortgagee must
      modify the payment instructions of the Form HUD-27034 before
      the mortgagor completes Item 17, Certification of Eligibility,
      by lining out the words "jointly to the mortgagor(s) and the
      refinancing mortgagee named below," and subsequently, ensuring
      that the mortgagor(s) initial the change when Item 17 is
      completed.
 
           If you have any questions concerning this letter, please
      contact the Single Family Programs and Procedures Branch at
      202-426-7212.
 
                                      Sincerely yours,
 
                                      Thomas T. Demery
                                      Assistant Secretary
 
      Enclosure
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