www.hudclips.org 


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

June 15, 1994
OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
Mortgagee Letter 94-26
     TO:  ALL APPROVED MORTGAGEES
     SUBJECT:  Single Family Loan Production:  HUD Reorganization
 
          The purpose of this Mortgagee Letter is to inform you of the
     reorganization that is occurring in HUD and to tell you how it is
     going to affect FHA's single family mortgage insurance program.  Last
     year, the Vice President of the United States headed an effort called
     the "National Performance Review," which examined the organization and
     performance of each Federal government agency and made recommendations
     to increase the efficiency and effectiveness of agencies and their
     programs.  This effort commonly became known as "reinventing
     government."
 
          Secretary Cisneros has accepted many of the recommendations made
     by the National Performance Review, but he also went a step further.
     The Secretary established several internal HUD Task Forces to build
     upon the recommendations made by the National Performance Review and
     to examine in more detail, the organizational structure of HUD and
     recommend changes so that HUD could better serve the needs of its
     customers.  By reorganizing and "reinventing HUD," the Secretary
     believes that HUD can provide better service to customers and lower
     costs to taxpayers.
 
          Consistent with the Secretary's goals, the Office of Housing
     (FHA) intends to reorganize its field operations.  The major changes
     taking place over the coming months are as follows:
 
          o    HUD's ten Regional Offices will be eliminated to reduce an
               unnecessary layer of management.  (No HUD Field Offices will
               be closed.)
 
          o    All Housing/FHA managers will report directly to the
               Federal Housing Commissioner or through Headquarters'
               Deputy Assistant Secretaries, instead of the former Regional
               Administrators.  This will give the FHA Commissioner direct
               control over field resources.  It also fosters more
               accountability among FHA employees.
 
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     o    The Housing/FHA organization in the larger HUD Field Offices will
          be split into Single Family and Multifamily divisions, consistent
          with our product lines.  Smaller HUD Field Offices that now
          perform just single family functions will continue to provide
          this service.
 
     o    This summer we propose to establish in Denver, Colorado a
          prototype "Single Family Underwriting and Processing Center" to
          process single family mortgage insurance applications and provide
          other related underwriting and insuring services.  This center
          will take advantage of emerging technology to better serve
          lenders and our other customers.  We believe that by
          consolidating and centralizing many single family underwriting
          and processing functions, FHA will provide more efficient and
          timely insuring of mortgages.  Policy guidance will be more
          consistent, and other services will improve, such as providing
          regular training for lenders and other program participants.  The
          Denver Center will begin to handle cases from Texas and then
          expand its territory to most of the areas comprising HUD's former
          Regions VI and VIII.  Lenders doing business in those regions
          will receive specific information on how the Denver Center will
          affect their case processing.  If the Denver Center proves itself
          to be successful, then other centers may be established over
          time.
 
     Along with establishing the Denver Underwriting and Processing Center,
the FHA will be expanding its use of computer systems to help provide
better service.  Lenders that currently use our CHUMS Lender Access System
(CLAS) for case number assignments, insurance endorsement processing and
other functions will be in a much more competitive position to use FHA than
lenders who do not take advantage of this automated system.  (See Mortgagee
Letter 92-10  for more information about CLAS.)  We strongly encourage
lenders, if they have not done so already, to become CLAS users and to use
the other automated systems that HUD has developed to support single family
case processing, such as the Automated Clearing House process for the
payment of mortgage insurance premiums described in Mortgagee letter 94-9.
 
     We will keep you informed as the reorganization of FHA progresses.
 
Sincerely yours,
 

Nicolas P. Retsinas
Assistant Secretary for Housing
- Federal Housing Commissioner