www.hudclips.org 


U. S. Department of Housing and Urban Development
Washington, D.C. 20410-8000

April 5, 1993
OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
MORTGAGEE LETTER 93-10
     TO:   ALL APPROVED MORTGAGEES
     ATTENTION:   SINGLE FAMILY SERVICING MANAGERS
     SUBJECT:     Single Family Claims for Insurance Benefits:
                     Electronic Data Interchange Pilot Implementation
 
           In the near future the Department of Housing and Urban
     Development will begin the pilot phase of its Electronic Data
     Interchange (EDI) program.  The two mortgage servicers selected to
     participate with HUD in this pilot are Source One Mortgage Services
     Corporation of Farmington Hills, Michigan, and BancPLUS Mortgage
     Corporation of San Antonio, Texas.  These lenders were selected from
     over 80 lenders that responded to a joint survey conducted with the
     Mortgage Bankers Association.  Following successful conclusion of the
     pilot effort, which is expected to span approximately three months,
     additional lenders will then be added to the program.  Ultimately, HUD
     expects to expand the EDI program to all lenders servicing FHA
     mortgages.  However, before any lender may be added to the program HUD
     requires that the lender complete and return a Mortgagee Profile
     Survey.  Copies may be requested from the Office of Information
     Policies and Systems (attention Rex Gavin at (202)-708-0306).
 
            Initially, the pilot will focus upon the electronic
     transmission of Single Family Claims for Insurance Benefits (Form
     HUD-27011).  Additional applications that will be added include
     electronic transmission of Single Family Mortgage Defaults (Form
     HUD-92068A) and electronic transmission of Mortgage Record Changes
     (Form HUD-92080).  HUD's goal is to utilize the EDI process to fully
     automate the entire mortgage insurance process.
 
            One element of the EDI program that will affect all lenders
     including those not yet participating in this program will be a minor
     change in the appearance of your title approval letters.  Local HUD
     Offices will continue to review and approve your title evidence, but
     the actual letters will be centrally produced.  Each title approval
     letter will identify the approving office, but will not bear a
     signature since it will be system generated.
 
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      HUD has compiled an Implementation Guide to fully explain how the EDI
program will function, including how, and what is required of lenders, to
participate in this program.  The guide will be made available, at a
scheduled EDI orientation, to each lender that has previously completed
the Mortgagee Profile Survey and has expressed an interest in EDI.
 
      The EDI process will revolutionize the way we do business.  With a
paperless mortgage claims process, claims will be transmitted directly to
HUD's claims processing system with no delivery delay and no manual
intervention.  Faster receipt of claims means faster payment.
 
                                        James E. Schoenberger
                                        Associate General Deputy
                                          Assistant Secretary for Housing