U.S. Department of Housing and Urban Development
                         Washington, D.C.  20410-8000
                              October 10, 1996

OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER

                                                           TI-441

TO:  ALL TITLE I LENDING INSTITUTIONS

SUBJECT:  LOCKBOX CLOSES FOR TITLE INSURANCE PREMIUMS

     Section 201.31(b)(4) of the Title I regulations provides
that the Secretary may require that loan insurance charges be
remitted electronically, and that instructions implementing this
requirement would be communicated to all affected lenders.

     Paragraph (b)(4) was added to Sec. 201.31 in a final rule
that was published in the Federal Register on March 14, 1995,
with an effective date of April 13, 1995.  All Title I lenders
were notified of the addition of paragraph (b) (4) by Title I
Letter TI-432 , dated June 5, 1995.  TI-432 informed lenders that
the Department intended to implement electronic payment, using
the Automated Clearing House (ACH) program, as the sole method
for payment of Title I insurance charges as soon as possible.
 TI-432  also contained instructions for use of ACH.

     The Department is now prepared to accept all insurance
charge payments through ACH.  As a result, the collections
lockbox at Nations Bank will close on December 31, 1996.
Beginning January 1, 1997, it will be mandatory for Title I
lenders to remit insurance charge payments through the ACH
program.

     If you have access to ACH, but have not utilized it, you
should begin to do so immediately.  If you have not signed up,
you must contact the Title I ACH Implementation Team at (202)
755-7545, extensions 110 and 111.  The necessary information and
set-up instructions for ACH will be forwarded after you have
contacted the Implementation Team.
                                                            2

     For further information, or if you have any questions about
this letter, please write to the Department of Housing and Urban
Development, Title I Insurance Section, P.O. Box 44426, L'Enfant
Plaza Station, Washington, D.C.  20026-4426.

                                   Sincerely yours,

                                   Nicolas P. Retsinas
                                   Assistant Secretary
                                   Housing-Federal Housing
                                     Commissioner