www.hudclips.org 


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

June 22, 1995
 
MORTGAGEE LETTER 95-30
 
TO:   ALL APPROVED MORTGAGEES
 
ATTENTION:   SINGLE FAMILY SERVICING MANAGERS
 
SUBJECT:   Electronic Commerce Program for Single Family Default Monitoring
                      System (SFDMS) Reporting
 
REFERENCE:   Mortgagee Letter 94-49, Electronic Commerce with FHA - A New
                          Business Paradigm, October 1994
 
      Electronic commerce with the Federal Housing Administration (FHA)
continues to grow! The U.S. Department of Housing and Urban Development (HUD)
is pleased to announce the operational readiness of the second Electronic Data
Interchange (EDI) business process offering, "Mortgage Loan Default Status".
In lieu of using Form HUD-92068A in either a paper or magnetic format,
mortgagees may now report via EDI using the transaction set (TS) 264 . The
availability of HUD's first EDI offering, "Application for Mortgage Insurance
Benefits", TS 260, was announced in October 1994 (see referenced Mortgagee
Letter).
 
      Thanks to the dedicated participation of the BancPlus Mortgage
Corporation, BLSI/BYSIS Information Services Group, and Intermountain Mortgage
Company, Inc., serving as HUD's test partners, the development of an EDI
process for electronically filing mortgage loan default status reports has
reached a successful conclusion.  All three companies are now submitting their
Form HUD-92068A reports to HUD via EDI, and receiving immediate feedback
concerning the accuracy of their submissions.  Their success clearly supports
our belief that EDI is revolutionizing the way the
mortgage industry conducts business.  Those mortgagees now reporting Form
HUD-92068A via EDI have several advantages over all mortgagees still reporting
via paper or tape format. The use of EDI eliminates delivery errors and
delays, facilitates efficient and timely processing, provides complete
reconciliation of data, and accommodates corrections within the same reporting
period.
 
                                                                 2
 
      HUD is now scheduling EDI-capable mortgage lenders/servicers for
induction into the Department's EDI program in two business transaction areas:
Single Family Claims for Insurance Benefits (Form HUD-27011) and Mortgage Loan
Default Status Reports (Form HUD-92068A).  To these two EDI applications, HUD
will soon add Mortgage Record Changes/Terminations (Forms HUD-92080 & 27050A).
Mortgage insurance premium collections will become a part of the EDI program
later this year.
 
      The Department will initially add those mortgage lenders/servicers that
have taken the preliminary steps to join the program through (1) attendance at
a HUD EDI orientation seminar, and (2) submission of an EDI Mortgagee Profile
Survey to HUD.  If your company has completed these requirements, your next
step is to provide HUD with a preferred date to begin the transition to
becoming a HUD EDI trading partner.  Please contact Mr. John Buck, HUD's
Trading Partner Coordinator, at (800) HUD-4EDI (i.e., (800) 483-4334) to let
us know your intentions to use one or more of the
transaction types listed in the attached EDI Near-Term Program Schedule.
 
      HUD will provide guidance during your preparations using our Trading
Partner support program as soon as you are ready, and will schedule you to
begin testing and start-up procedures.  "Ready" means that you are EDI-capable
with a value-added network (VAN) and appropriate EDI software.  If you use the
facilities of a service bureau, becoming EDI-capable may be simplified, as HUD
has taken steps to encourage these companies to provide EDI-capable services
to their clients.
 
      If your company has not yet taken the preliminary steps to join the
program, we urge you to begin doing so at this time by:
 
      A.  Completing and returning an EDI Profile Survey form to HUD. The
          survey form may be obtained by contacting HUD's EDI Trading
          Partner Coordinator at (800) 483-4334.
 
      B.  Planning to attend a HUD EDI Orientation Seminar.  Please inform
          the Trading Partner Coordinator of your interest, and we will
          forward literature about the next seminar as soon as it becomes
          available.
 
      Attendees at each HUD EDI Orientation Seminar receive a copy of HUD's
EDI Implementation Guide.  This guide describes in detail the technical and
administrative considerations involved in implementing EDI with HUD.
Attendees also receive a copy of presentation materials that cover EDI
business considerations.
 
                                                                   3
 
      The use of EDI is a strategic business advantage and will significantly
enhance the way HUD and mortgage lenders/servicers conduct business.  We look
forward to having all HUD-approved mortgagees join us in this exciting new
endeavor.
 
Sincerely yours,
 

Nicolas P. Retsinas
Assistant Secretary for Housing
-Federal Housing Commissioner
 
Attachment
                     EDI NEAR-TERM PROGRAM SCHEDULE
 
Transaction
    Type
Transaction Set
     Number
    Title of
Transaction Set
   Estimated
Implementation
     Date
 
    260
Application for Mortgage
Insurance Benefits
(replaces paper Form HUD-
27011, Single Family
Claims for Insurance
Benefits
 
 Now Available
 
Claims
    820
Payment Order/Remittance
Advice
 Now Available
 
    824
Application Advice (for
Single Family Claims
 Now Available
 
Default
Reports
    264
Mortgage Loan Default
Status (replaces paper
Form HUD-92068A, Single
Family Mortgage Defaults)
 Now Available
 
    824
Application Advice (for
Default Status)
 Now Available
 
MRCs
    266
Mortgage Record Change
(MRC)/Terminations
(replaces paper Form HUD-
92080 and 27050)
 July 1995
 
    824
Application Advice (for
Mortgage Record Changes)
 July 1995