www.hudclips.org U. S. Department of Housing and Urban Development Washington, D.C. 20410-8000 February 13, 1995 OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONER Mortgagee Letter 95-9 To: ALL APPROVED MORTGAGEES SUBJECT:Implementation of Book Entry for Federal Housing Administration (FHA) Debentures REFERENCE: Mortgagee Letter 94-23, Implementation of Book Entry for Federal Housing Administration (FHA) Debentures, dated May 13, 1994 This letter announces the implementation date of the Department's conversion of FHA debentures from the certificate form to the book-entry form. Effective January 4, 1995, all FHA debentures will be issued in book-entry form. This date was published in the Federal Register on December 23, 1994, by the Bureau of the Public Debt. Debentures are issued (in lieu of cash) to any HUD-approved mortgagee in settlement of mortgagees' applications for insurance benefits under certain Single Family and Multifamily Mortgage Insurance Program. Currently, the only single family claims paid with debentures are optional assignments of loans insured under Section 221(g)(4) of the National Housing Act (NHA). However, multifamily claim may be paid with debentures under any section as specified by the NHA and as implemented by regulation. The primary difference between book-entry and certificated debentures is the physical form. The certificated debenture is being replaced by a computer-generated Statement of Account (SOA). The SOAs will list details of the debentures being issued in book-entry form. See Attachment 1. SPECIAL REDEMPTION PURCHASES Debenture holders who request the redemption of certificated debentures in exchange of mortgage insurance premium (MIP) payments (special redemption purchases), and who are due a reissue for the difference, will receive the reissue in book-entry form. Once debentures are issued in book-entry form, holders will not be permitted to convert back to certificates. 2 The procedure for processing requests to HUD for special redemption purchases of certificated debentures remains the same. However, when requesting special redemption purchases of a book-entry issued debenture, forward to HUD a copy of the SOA on which the debenture was issued, accompanied by a cover letter detailing your request. EXCHANGES, TRANSFERS, ASSIGNMENTS, CONVERSIONS Transactions involving certificated debentures for denominational exchanges, transfers of ownership, assignments, conversions and replacements for losses will also be issued in book-entry form. Forms for these transactions are illustrated in Attachments 2/5 and are available from the Securities Division - HUD Unit of the Federal Reserve Bank of Philadelphia, Post Office Box 90, Philadelphia, PA 19105-0090. AUTOMATIC CLEARING HOUSE (ACH) If you have not already signed up for direct deposit, and you are an FHA debenture holder, please file the FHA Transaction Request, Form PD F 5354 (Attachment 5) with the Federal Reserve Bank of Philadelphia (FRBP). ACH is the method HUD uses with book entry to pay the retroactive interest due upon settlement of a claim; the semiannual interest due January and July of each year; and the principal and interest due when debentures are redeemed. We recommend you review Mortgagee Letter 94-23 to reacquaint yourself with the information it provides on the FHA debenture book-entry system. If you have any questions concerning this letter, please contact Linda Milner at HUD on (202) 708-1115 or Suzanne Furr at the FRBP on (215) 574-6699. Sincerely, Nicolas P. Retsinas Assistant Secretary for Housing - Federal Housing Commissioner Attachments Attachment 1 ______________________________________________________________________ STATEMENT OF ACCOUNT ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ______________________________________________________________________ Attachment 2 ______________________________________________________________________ A NEW ACCOUNT REQUEST ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ______________________________________________________________________ Attachment 2 (Continued) ______________________________________________________________________ INSTRUCTIONS FOR COMPLETING AN FHA NEW ACCOUNT REQUEST ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ______________________________________________________________________ Attachment 3 ______________________________________________________________________ FHA DEBENTURE TRANSFER REQUEST ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ______________________________________________________________________ Attachment 3 (Continued) ______________________________________________________________________ ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ______________________________________________________________________ Attachment 3 (Continued) ______________________________________________________________________ INSTRUCTIONS FOR COMPLETING AN FHA DEBENTURE TRANSFER REQUEST ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ______________________________________________________________________ Attachment 4 ______________________________________________________________________ SPECIAL FORM OF ASSIGNMENT FOR FHA REGISTERED DEFINITIVE DEBENTURES ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ______________________________________________________________________ Attachment 4 (Continued) ______________________________________________________________________ ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ______________________________________________________________________ Attachment 5 ______________________________________________________________________ FHA TRANSACTION REQUEST ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ______________________________________________________________________ Attachment 5 (Continued) ______________________________________________________________________ ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ______________________________________________________________________ Attachment 5 (Continued) ______________________________________________________________________ INSTRUCTIONS FOR COMPLETING AN FHA TRANSACTION REQUEST ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ______________________________________________________________________ Attachment 5 (Continued) ______________________________________________________________________ ******************************************************************** * GRAPHICS MATERIAL IN ORIGINAL DOCUMENT OMITTED * ******************************************************************** ______________________________________________________________________