www.hudclips.org U. S. Department of Housing and Urban Development Washington, D.C. 20410-8000 September 22, 1995 MORTGAGEE LETTER 95-41 TO: ALL APPROVED MORTGAGEES ATTENTION: SINGLE FAMILY SERVICING MANAGERS SUBJECT: Electronic Commerce Program for Mortgage Record Change and Mortgage Insurance Termination Reporting Reference: Mortgagee Letter 94-49, Electronic Commerce with FHA - A New Business Paradigm, October 1994 Mortgagee Letter 95-30, Electronic Commerce Program for Single Family Default Monitoring System (SFDMS) Reporting, June 1995 Electronic commerce with the Federal Housing Administration (FHA) continues to grow! The Department of Housing and Urban Development (HUD) recently announced the operational readiness of HUD's third electronic data interchange (EDI) business process, Mortgage Record Change/Termination, transaction sets (TS) 266 and 824. In lieu of paper Forms HUD-92080, Mortgage Record Change, and Forms HUD-27050-A, Mortgage Insurance Termination, mortgage companies can now submit their data via EDI using TS 266/824 and receive prompt feedback confirming the accuracy of their submissions. HUD formally announced the operational availability of TS 260, Application for Mortgage Insurance Benefits, in October 1994 and TS 264, Mortgage Loan Default Status, in June 1995 (see referenced Mortgagee Letters). Thanks to the dedicated participation of the Prudential Home Mortgage Corporation, serving as HUD's test partner, the development of an EDI process for electronically filing mortgage record change/termination has reached a successful conclusion. Prudential is now submitting Forms HUD-92080 and HUD-27050-A via EDI and receives immediate feedback concerning the accuracy of its submissions. In fact, mortgagees reporting via EDI have several advantages over all mortgagees still reporting via paper or other format. The use of EDI eliminates delivery delays, facilitates efficient and timely processing, provides complete reconciliation of reporting and accounting data, and facilitates much faster payment of Mortgage Insurance Claims. Prudential's success provides more evidence that EDI is revolutionizing the way the mortgage industry conducts business. 2 HUD is now scheduling EDI-capable mortgage lenders/servicers for implementation into the Department's EDI program in three business transaction areas: Single Family Claim for Insurance Benefits (Form HUD-27011), Mortgage Loan Default Status Reports (Form HUD 92068-A), and Mortgage Record Change/ Termination (Forms HUD-92080 and HUD-27050-A). Mortgage insurance premium collections will become a part of the EDI program next 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 We encourage you to call HUD's EDI Trading Partner Coordinator, Mr. John Buck, at (800) HUD-4EDI (or 800-483-4334) to discuss your plans for EDI. He will review the EDI implementation process with you, and if you are ready, he will assign a testing start date for one or more of the transaction types. Since he will schedule companies on a first-come, first-serve basis, we suggest that you call him as soon as possible. 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 FHA PROGRAM SCHEDULE Transaction Title of Estimated Transaction Set Transaction Implementation Type Number Set Date ======================================================================== 260 Application for Mortgage Now available Insurance Benefits (replaces paper Form HUD-27011, Single Family Claims for Insurance Benefits). Claims 820 Payment Order/Remittance Now available Advice. 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 Mortgage Record Changes 266 Mortgage Record Change (MRC)/ Terminations (replaces paper Form HUD-92080 and -27050). Now available 824 Application Advice (for Mortgage Record Changes). Now available Mortgage Insurance Premiums 810 Invoice. February 1996 820 Payment Order/Remittance Advice. February 1996