www.hudclips.org 


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

December 20, 1989
  OFFICE OF THE ASSISTANT SECRETARY FOR
  HOUSING-FEDERAL HOUSING COMMISSIONER
Mortgagee Letter 89-29
  TO:  ALL APPROVED MORTGAGEES
  SUBJECT:  Single Family Default Monitoring System (SFDMS)  -
              Addition of Status Codes
 
          Effective immediately, the monthly reporting of 90 days +
     delinquencies on the Single Family Default Monitoring System
     (SFDMS) is being modified.  Due to the recent audit of the FHA
     funds, it is extremely important that the Department knows the
     reasons for deletion of cases from the default system.  This
     modification does not make any change in the reporting Form
     HUD-92068-A, 90 or More Days Delinquent Loan Report, but does
     eliminate Code I and add some new codes to Section M (Status of
     Mortgage).
 
          Currently Code I (Delete) in Section M covers a number of
     conditions, such as cases reported in error, loans paid down to
     less than 90 days delinquent, paid off, reinstated, or servicing
     transferred or sold to another mortgagee.  This Code I (Delete)
     must no longer be used.  Continue to report status codes A
     through H in Section M as appropriate.  New codes J through X
     are being added to report each of the conditions formerly
     reported under Code I (Delete) and to separate the reporting of
     a reinstatement by the current mortgagor or by an assumptor.
     The following codes will be used instead of Code I:
 
Code      Condition
 
J.        Paid to less than 90 days delinquent
          Also enter the date MM/YY when delinquency was reduced to
          less than 90 days.  Do not report case In future Form A
          reports unless it returns to a 90 days + delinquency
          status.
 
K.        Reinstated by mortgagor (who retains ownership)  Also enter
          the date MM/YY when reinstated to current status.  Do not
          report case in future Form A reports unless it returns to a
          90 days + delinquency status.
 
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                                                                 2
 
L.        Reinstated by assumptor
          Also enter the date MM/YY when the assumption took place.
          Do not report case in future Form A reports unless it
          returns to a 90 days + delinquency status.
 
M.        Paid in full
          Also enter the date MM/YY when loan was paid in full. Do
          not report this case again.
 
N.        Servicing transferred or sold to another mortgagee. Also
          enter the date MM/YY of the transfer or sale. Do not report
          this case again.
 
X.        Cancel -- Case reported in error
          Also enter the date MM/YY of this cancellation of a prior
          error.  Do not report this case in future Form A reports
          unless it reaches a 90 days + delinquency status.
 
   The use of these new codes is of the highest priority to the
Department because the conditions noted by these new codes represent
adjustments to the loss reserves set up for the various insurance
funds, based on the accounting methods now prescribed by the U.S.
General Accounting Office.  Please see that all of your staff
involved in the servicing of FHA mortgages, as well as ADP staff or
service bureaus keeping your records are advised of this important
change, and action is taken immediately to handle this new
requirement.
 
   HUD review teams are being advised of this change and future
reviews will cover compliance with this requirement.
 
                              Sincerely yours,
 
                              Assistant Secretary for Housing-
                              Federal Housing Commissioner
 
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