www.hudclips.org 


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

June 27, 1996
 
MORTGAGEE LETTER 96-31
 
  TO:  ALL APPROVED MORTGAGEES
 
  ATTENTION:  SINGLE FAMILY SERVICING MANAGERS
 
  SUBJECT:  Mandate for Electronic Data Interchange (EDI) for Single
                Family Claims.
 
     Effective June 1, 1997, all Single Family Application for
  Insurance Benefits (Form HUD-27011) claim forms must be sent to HUD
  Headquarters using Electronic Data Interchange (EDI).  Exceptions to
  this requirement are supplemental claims and Home Equity Conversion
  Mortgage (HECM) insurance claims.  Also, mortgagees must continue to
  send paper claims to HUD Field Offices.
 
     HUD's first EDI trading partners began filing electronic versions
  of the HUD-27011 in July, 1994.  Currently, over twenty percent of
  single family claims are filed electronically.  The mortgagees using
  this process have been pleased with the numerous benefits including:
  faster payment, immediate feedback on every claim transmission, faster
  turnaround on suspended claims, fewer "lost" mail problems, better data
  quality and increased control resulting from computerized records.  In
  January, 1996, HUD added the capability for trading partners to file
  corrected claims and comments electronically and the option to use
  service bureaus to transmit EDI claims.  With these enhancements in
  place, HUD is ready to extend the benefits of electronic claim filing to
  all mortgagees.
 
     Current trading partners represent companies with a wide range in
  size of FHA portfolios.  Some transmit thousands of claims each year
  while others transmit less than a hundred claims in a year.  Companies
  use a variety of ways to conduct electronic commerce, including
  transmitting claims using a vendor software package, using their own
  custom designed software, or using
 
                    2
 
  a service bureau to perform the technical aspects of EDI transmissions.
  HUD believes that there are sufficient alternatives available to
  mortgagees so that each can choose a workable method to file EDI claims
  in accordance with mutually agreed upon standards.
 
     If you are not currently participating in HUD's EDI program and
  have not submitted an EDI Profile Survey, please see Mortgagee Letter
  96-14, dated March 19, 1996.  For further assistance or information
  about becoming EDI capable, contact HUD's Trading Partner Coordinator at
  1-800-HUD-4EDI, (i.e., 1-800-483-4334).
 
Sincerely yours,

 
Nicolas P. Retsinas
Assistant Secretary for Housing
-Federal Housing Commissioner