HUD ML 2004-26

TO:      ALL APPROVED MORTGAGEES

ATTENTION:     SINGLE FAMILY SERVICING MANAGERS

SUBJECT:  FILING CONVEYANCE AND PRE-FORECLOSURE SALE CLAIMS
          VIA THE FHA CONNECTION

Conveyance and pre-foreclosure sale claims can now be filed electronically using the FHA Connection.  Most lenders are already using the FHA Connection for a variety of functions, including checking claim status and title approval records.  This new enhancement will make it possible for lenders to switch from paper claim filing to electronic submission for these two claim types and avoid the $100 fee for filing paper conveyance and pre-foreclosure sale claims.  This enhancement is an additional means of filing conveyance and pre-foreclosure sale claims.  Conveyance and Pre-foreclosure sale claims can also be submitted via Electronic Data Interchange (EDI) or paper.

Liability for claims filed via FHA Connection:

Lenders are liable for the contents of any claims they file via the FHA Connection.  Electronic submission of the claim constitutes certification that the statements and information contained in the claim are true and correct.  Lenders control who can file claims on their behalf because it is their responsibility to oversee the release of user IDs to their employees.  It is extremely important that lenders carefully select their Application Coordinators and conscientiously keep track of standard users, promptly terminating any who have left the company and updating authorizations when appropriate.

At the time the claim is submitted, the user's FHA Connection user ID is validated and the corresponding mortgagee ID must be either the holder or servicer displayed on the claim submission.   To ensure the security of electronic claim filing over the FHA Connection, as well as other FHA Connection applications, we advise all users to exit the browser after completing a session using Claim Input.  This will prevent another user of the same computer from gaining access under the first user's ID.