U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
                              WASHINGTON, D.C. 20410-8000
                                September 25, 1986

OFFICE OF THE ASSISTANT SECRETARY FOR
HOUSING-FEDERAL HOUSING COMMISSIONER                            TI-379
 

   MEMORANDUM FOR:  ALL TITLE I LENDING INSTITUTIONS
                     Attn:  Installment Loan Department
    SUBJECT:  Pre-Claim Collection Assistance
 
         In an effort to provide lending institutions with collection
    assistance on delinquencies and defaults, upon request, HUD will
    send a pre-claim assistance letter to recalcitrant borrowers.
 
         Lenders should only request this assistance after their
    collection efforts have been completely exhausted.  The pre-claim
    letter is meant to be the final attempt to collect prior to filing
    a claim for insurance benefits; it is not intended to be a part of
    your routine servicing.  The letter should not be sent to
    borrowers who are bankrupt or those you cannot locate.
 
         Requests for pre-claim letters should be submitted on form
    HUD-55083, Notice of Intention to File Title I Claim and Request
    for Collection Assistance, to the local HUD office having
    jurisdiction in the area in which the borrower is residing.  We
    are now using two pre-claim letters, one for property improvement
    loans and the other for manufactured home loans; therefore, it is
    important that you indicate on the form whether a property
    improvement or manufactured home loan is involved.
 
         The pre-claim collection assistance letter is helpful because
    many borrowers are unaware of HUD's involvement in the loan
    transaction.  The letter advises borrowers of the consequences if
    they fail to make payments on the loan and HUD has to pay a claim,
    and urges them to contact the lending institution to arrange a
    satisfactory repayment schedule.
 
         If you have any questions concerning this letter, please
    contact Robert J. Coyle, Acting Director, Title I Insurance
    Division, Washington, D.C., telephone (202) 755-6880.
 
                                  Very sincerely yours,
 
                                  Silvio J. DeBartolomeis
                                  General Deputy Assistant Secretary