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

                             August 23, 1991

OFFICE OF THE ASSISTANT SECRETARY FOR                  TI-410
HOUSING-FEDERAL HOUSING COMMISSIONER

     MEMORANDUM FOR:  ALL TITLE I LENDING INSTITUTIONS
                      Attn:  Installment Loan Department
     SUBJECT:  Procedures for Appeal of a Claim Denial or
               Request for a Waiver of Noncompliance
 
          A Title I lender is entitled to appeal the denial of an
     insurance claim or to request a waiver of noncompliance with the
     regulations.  This letter is to provide all lenders with guidance
     on the proper procedures for submitting an appeal or requesting a
     waiver.
 
     Appeal of a Claim Denial
 
          You may appeal a claim denial if you believe that the
     Department made an error in its evaluation of the original claim
     submission or overlooked information that was included in the
     submission.  You will need to resubmit the claim with a
     transmittal letter that addresses each violation identified in
     the denial letter.  If the claim was denied because of incomplete
     documentation, the missing information, clearly identified, must
     be included with the resubmitted claim.
 
     Request for a Waiver of Noncompliance
 
          If you cannot refute the reasons for the claim denial, you
     may request a waiver of the noncompliance, provided that the
     noncompliance does not involve a violation of a statutory
     provision.  Your transmittal letter should clearly identify the
     nature of each noncompliance and the reasons why you believe that
     a waiver is warranted.  The Department's decision on whether to
     grant a waiver will be based on whether you have substantially
     complied with the regulations, and whether granting the waiver
     would increase the Department's liability beyond what it would
     have been if there had been full compliance.
 
     When and Where to Send Your Resubmission
 
          You are encouraged to send in your resubmission of a denied
     claim, either to appeal the denial or to request a waiver of
     noncompliance, within three months after the date of the denial
     letter.  The Department will not consider any appeal or request
     for a waiver that is received more than six months after the date
     of the denial letter.
 
_____________________________________________________________________
                                 2
 
     The complete claim package, together with a transmittal
letter documenting your appeal or your request for a waiver of
noncompliance, should be sent to:
 
               James A. Beale, Chief
               Title I Operations Branch
               HUD Building, Room 3138
               451 Seventh Street, S.W.
               Washington, D.C. 20410
 
For Further Information
 
     If you have any questions about this letter, please write to
Robert J. Coyle, Director, Title I Insurance Division, Room 9158,
451 Seventh Street, S.W., Washington, D.C. 20410, or call the
Department toll-free at 1-800-733-HOME (1-800-733-4663).
 
                           Sincerely yours,
 
                           Arthur J. Hill,
                           Assistant Secretary for
                           Housing-Federal Housing Commissioner