www.hudclips.org 


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

March 6, 1991
OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER
MORTGAGEE LETTER 91-13
      TO:  ALL APPROVED MORTGAGEES
      ATTENTION:  Servicing Managers (Single Family)
      SUBJECT:  Time Limit for Filing Supplemental Claims
 
           This Mortgagee Letter announces the establishment of a six
      month regulatory time limit for filing supplemental claims for
      mortgage insurance benefits.  The authority for this time limit
      was published as a final rule in the Federal Register, Volume 56,
      Number 19, dated January 29, 1991.  The specific citation is
      found at 24 CFR 203, Subject Single Family Insurance Claim
      Settlements.
 
           This rule formalizes a change from a one year time limit to
      six months and applies to all single family claims for insurance
      benefits where the initial submission of Part A, Form HUD-27011,
      is received on or after February 28, 1991.  Mortgagees may
      confirm the date Part A, Form HUD-27011 was received on the
      Advice of Payment Notification for Part A.
 
           Mortgagees will have six months from the date of final
      settlement to submit a supplemental claim.  For the purpose of
      identifying the date of final settlement, the mortgagee shall use
      the date of settlement noted on their Advice of Payment that was
      issued as a result of the mortgagee's initial submission of
      Part B, Form HUD-27011.  Or, if the net amount due from the
      submission of Part B is negative and funds are due to HUD, a
      billing notice will be issued and mortgagees are to use the date
      of this billing notice as the date of final settlement.
 
           The time limit for submission of supplemental claims will be
      changed from one year to six months effective February 28, 1991.
      HUD anticipates two exceptions to the six month requirement where
      approval of extensions may be appropriate.  These are:  supplemental
      claims for costs incurred in connection with the pursuit
      of a deficiency judgment on HUD's behalf; and, hazard insurance
      refund adjustments.  Since HUD expects mortgagees to frequently
      follow up with insurance carriers, the instances where insurance
      adjustments are necessary beyond the six month time limit should
      be rare.
 
           The restriction for filing supplemental claims within the
      six month period does not apply where the mortgagee is filing a
      supplemental claim to return funds due to the Department.
 
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     This reduction of time has been put into place to assure
accurate and timely reconciliation of claims.  There should not
be an adverse impact upon those mortgagees who have in place
quality control procedures to review claims for accuracy prior to
submission of their claims and procedures to promptly reconcile
all line items upon receipt of their Advice of Payment
Notifications.
 
     If you have questions, you may contact the local HUD Office
within your jurisdiction.
 
                     Very sincerely yours,
 
                     Arthur J. Hill
                     Acting Assistant Secretary for Housing-Federal
                       Housing Commissioner