www.hudclips.org 


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

August 9, 1996
 
MORTGAGEE LETTER 96-43
 
TO:  ALL APPROVED MORTGAGEES
 
SUBJECT:  Mandate for Electronic Funds Transfer (EFT) for
          Single Family Claims
 
     Effective December 31, 1996, all payments for Single Family
Mortgage Insurance Benefits will be made via Electronic
Funds Transfer (EFT) through the Automated Clearing House (ACH)
network.  This mandate enforces the Debt Collection Improvement
Act of 1996, Section 31001(x) which directs agencies to make all
Federal payments by EFT.  Mortgagees who are not currently
receiving Single Family Insurance claim payments via EFT must
have an ACH Vendor/Miscellaneous Payment Enrollment Form (SF
3881) on file at HUD no later than September 30, 1996.
 
     HUD began payment of claims for insurance benefits
through the ACH network in June 1993.  The payment system is
called Vendor Express and offers the following benefits:
 
     -    No deposit delays
 
     -    Prompt availability of funds
 
     -    Better cash management
 
     -    No lost or stolen checks
 
     -    Fully traceable payments
 
     To assist your company in identifying payments, an addendum
record will be included with each payment issued to your bank.
This includes the FHA case number, your company's reference
number, and the disbursement schedule number.  HUD will use the
Cash Concentration or Disbursement Plus (CCD+) ACH payment format
to transmit your payments and addendum records to your bank.
Although you will continue to receive an advice of payment
notification letter for each payment, you and your bank should
agree how and when the addenda data furnished by HUD will be
provided to your company.
 
                               2
 
     ACH enrollment forms and information booklets were
previously sent to most mortgagees.  However, if you need
enrollment forms or information booklets, please contact the
Single Family Claims Support Service Center at (703) 235-9102 to
request copies.
 
Sincerely yours,
 

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