www.hudclips.org 


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

January 28, 1993
OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
MORTGAGEE LETTER 93-6
   TO:  ALL APPROVED MORTGAGEES
   ATTENTION:  SINGLE FAMILY SERVICING MANAGERS
   SUBJECT:  Advisory Regarding the Filing of Form HUD-27050A,
               "Mortgage Insurance Termination," in the
               Context of the Pre-foreclosure Sale Program
 
        The Department has learned that some mortgagees have been
   filing Form HUD-27050A, "Mortgage Insurance Termination,"
   following the sale, through the Pre-foreclosure Sale Program,
   of properties with FHA-insured mortgages.  This is an erroneous
   practice and should never occur in situations involving
   pre-foreclosure (also known as "short") sales, where the mortgagee
   has filed, or intends to file, a claim for insurance benefits.
 
        The only reasons for a mortgagee to file a HUD-27050A are:
 
              A   maturity of the loan;
              B   prepayment of the loan;
              C   a third party sale of the property where no claim
                  will be filed; or
              D   voluntary termination by the mortgagor and
                  mortgagee.
 
   Filing the Form HUD-27050A for any other reason will jeopardize
   the mortgagee's ability to receive payment of a claim for FHA
   insurance benefits.
 
        You must notify HUD immediately of any case for which the
   Form HUD-27050A was erroneously filed.  To expedite correction of
   these cases, you may FAX the following information to the Systems
   Management Branch at (202) 401-1252.
 
             1.  FHA Case Number
             2.  Mortgagor Name(s) and Address
             3.  Mortgagee's Name and Address
             4.  Mortgagee's 10-Digit ID
             5.  Copy of the MIC
             6.  Contact Person at Mortgagee
             7.  Direct Phone Number of Contact Person
             8.  Date the Erroneous Form Was Submitted
 
_____________________________________________________________________
                                                               2
 
     If the form was erroneously submitted by a previous mortgage
servicer, please identify both the servicer that submitted the
form and the same information regarding your company.
 
                         Very sincerely yours,
 
                         James E. Schoenberger
                         Associate General Deputy
                           Assistant Secretary for Housing
 
                                 * U.S. G.P.O.:1993-342-362:80024