www.hudclips.org U. S. Department of Housing and Urban Development Washington, D.C. 20410-8000 June 14, 1994 OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONER Mortgagee Letter 94-25 TO: ALL APPROVED MORTGAGEES SUBJECT: Single Family Up Front Mortgage Insurance Premium (UFMIP) Fact Sheet Due to the increase in volume of Single Family applications for insurance and the backlog of lender requests for corrections to Mortgage Insurance Premium (MIP) payments, HUD receives a large number of requests for information about MIP processing. The Insurance Operations Division has developed an UFMIP Fact Sheet to assist our clients in processing FHA loans. The Fact Sheet is similar to the Homeowner Fact Sheet in that it can be used as a quick-reference tip sheet. The following topics are described and the appropriate phone numbers, facsimile numbers, addresses and their corresponding directives are listed in order to afford our clients the most efficient methods of processing MIP: o What are ECHO and MORNET? o What is ACH? o What is Netting Authorization? o What is the new Refinance Credit Computation? o How to resolve SOA problems? o Where to get Handbooks and Mortgagee Letters? Attached is a copy of the UFMIP Fact Sheet. All questions pertaining to this Mortgagee Letter should be directed to Karen Lee of the Insurance Operations Division, (202) 708-1693. Very sincerely yours, Nicolas P. Retsinas Assistant Secretary for Housing - Federal Housing Commissioner Attachment _____________________________________________________________________ FHA UFMIP U.S. Department of Housing and Urban Development Fact Sheet ___________________________________________________________________________ What are ECHO and ECHO and MORNET are the names of privately owned MORNET? networks that provide lenders an electronic vehicle to, among other services, request and receive new case numbers, appraisal assignments, Mortgage Insurance Certificate (MIC) case statuses, netting authorizations, duplicate MICs and duplicate Statements of Account (SOAs). ECHO allows the lender to correct non-monetary data if the SOA has been received through ECHO. To order ECHO or to receive technical assistance with ECHO call United Communications Group at 1-800-929-4824 Ext. 500. To order MORNET or receive technical assistance with MORNET call Fannie Mae at 1-800-752-6440. In Washington, D.C. call 202-752-6000. What is ACH? In August 1985, HUD implemented Automated Clearing House (ACH) for the remittance of Upfront Mortgage Insurance Premiums. ACH is designed to provide FHA approved lenders the opportunity to electronically authorize the payment of premiums, remit the HUD-27001 data and make corrections to Statements of Account. To implement ACH, contact the ACH Outreach Team at 703-845-4991. Why use ACH? o It is mandatory, as of April 7, 1993 o Control the timing of premium payment o Eliminate keying errors and make corrections o Avoid lost checks/mail o Receive an expedited Statement of Account For additional information refer to Mortgagee Letter 94-9. What is Netting A Netting Authorization will suspend a refund Authorization? application from being sent to the homeowner on a case awaiting refinance credit. Netting Authorizations are good for 60 days after being provided to the lender. After 60 days, the homeowner will be sent an application for their refund. An active Netting Authorization will prevent the homeowner from receiving both a HUD refund AND a credit from the mortgagee. Authorizations are not needed if there is no refinance credit to be applied to the new loan. For additional information refer to Mortgagee Letter 94-18. Why get a Netting o Prevent the homeowner from receiving the refund that Authorization? is supposed to be credited to their new loan. o Receive two months of correct data to compute the refinance credit. _____________________________________________________________________ How to get a o ECHO/MORNET - overnight response. Netting o Facsimile - 703-820-1590 - 24 hour response. Authorization? Include lender name and address, contact person, phone number, return fax number, closing date and property address. o Telephone - 703-235-8117 - data available immediately from operator. Requests are limited to three cases per phone call. How to correct If you have received your Netting Authorization and the Netting case data from HUD records indicates that the old loan Authorizations? was not insured OR the old loan data is not the same as your records indicate and you need further assistance: o Phone - Leave your name and number at 202-708-2775. You will receive a return call within two hours. If you are unreachable within two hours you will need to be paged or leave another message when you can be reached. ___________________________________________________________________________ June 7, 1994 _____________________________________________________________________ What is the new As of January 1, 1994, the refund to the homeowner or Refinance Credit the refinance credit amount is determined by Computation? multiplying the PREMIUM FACTOR by the amount of MIP on the old loan THAT SHOULD HAVE BEEN PAID. The exact numbers are provided to you with your netting authorization. Rounding estimates may result in small differences between the computed old MIP and the actual MIP paid. Use the computed amount provided with your Netting Authorization. The new case endorsement will be delayed if there is a discrepancy between your HUD-27001 data and HUD records. For more information about the changes in premium refund computation, see Mortgagee Letter 93-36. How to request a o by U.S. Mail Send written request with all pertinent refund of MIP information on letterhead to: overpayment? Department of Housing and Urban Development Disbursements Branch ATTN: Refund Voucher Group P.O. Box 44131 Washington, D.C. 20026-4131 o by phone - Call the HUD Telephone Center at 703-235-8117. How to resolve o by ACH - You can correct non-monetary data in ACH SOA and HUD will forward a corrected SOA in 3-5 days. problems? For assistance refer to the ACH User Manual or contact the ACH Outreach Team at 703-845-4991. o by ECHO - You can correct non-monetary data errors and receive a corrected SOA in 3-5 days. For assistance refer to the ECHO User Guide. For technical assistance with the software or transmission problems call United Communications Group at 1-800-929-4824 Ext. 500. Currently the feature for changing data in MORNET is not available. Note: Monetary and non-monetary data are defined in the ACH user Manual or you may refer to Mortgagee Letter 94-9. Monetary data errors must be corrected by HUD. Send a corrected copy of the SOA to: Department of Housing and Urban Development Single Family Insurance Operations Branch 451 7th Street, S.W. Room 2228 Washington, D.C. 20410 Due to current large volume of requests, please allow 120 days for processing. If you still have not received a corrected SOA call 703-235-8117 and give your lender i.d. number. _____________________________________________________________________ Where to get HUD o General Public - may request copies which will be Handbooks and mailed within 48 hours of receipt of request, by one Mortgagee of three methods: Letters? Telephone - 800-767-7468 toll free Write - U.S. Department of Housing and Urban Development Attention: Printing Branch, Room B-100 451 7th Street, S.W. Washington, DC 20410 Facsimile - 202-708-2313 Electronically - Mortgagee letters are posted on the ECHO Bulletin Board and can be viewed or printed using the ECHO network. ___________________________________________________________________________ June 7 1994