4710.1 CHG 3

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CHAPTER 3. REPORTING OF LOANS

3-1. GENERAL. This chapter has been prepared to assist lenders in

the proper reporting of Title I Mobile Home, Mobile Home Lot,

and Combination (mobile home and lot) Loans for insurance

registration and the handling of related transactions, including

the reconcilement and payment of the insurance charges billed

by HUD.

3-2. REPORTING REQUIREMENTS.

a\. Reporting Forms. The forms used for reporting Title I

mobile home related loans (Mobile Home, Mobile Home Lot,

and Combination Loans) are:

\(1\) For new loans. Title I Loan Reporting Manifest, Form

\* HUD-56004 (Appendix 3, pages 1 and 3), or 80-column

punched tabulating cards (Appendix 3, page 5).

\(a\) Lenders who utilize tabulating equipment or who

have devices that convert required reporting data

from other types of equipment to an 80-column

tabulating card, have the option of reporting new

loans for insurance registration either by means

of punched tabulating cards or by manifest, or by

both methods. However, to avoid duplicate billing,

only one method may be selected for reporting any

one loan. Further, if the Title I Loan Reporting

Manifest, Form HUD-56004, is elected, only the 7/76

and 10/79 revisions shall be used.

\(b\) Lenders who elect to use the card method of

reporting must order tabulating cards from their own

source of supply. The card must conform to the

illustration in Appendix 3, page 5. No other type

of tabulating card may be substituted, and no

deviation from instructions for preparation of the

card (Appendix 3, page 4) is permitted. \*

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4710.1 CHG 3

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(3-2) (2) For refinancing of loans. Title I Refinancing Report,

Form FH-5 (Appendix 3, page 7).

\(3\) For transfers of loans between lenders. Title I Transfer

of Note Report, Form FH-6 (Appendix 3, page 9).

\(4\) For transfer of loans to GNMA Pool. Title I Transfer of

Mobile Home Loans to GNMA Pool, Form HUD 676, (Appendix

3, page 11).

b\. When to Report. Title I Regulations require that a loan

initially reported for insurance registration shall be

reported within 31 calendar days from the date of the note or

date upon which it was purchased from a dealer. Refinancings

and transfers must be reported within 31 calendar days from

the date of refinancing or transfer. A refinance or transfer

report cannot be processed until the original note has been

acknowledged on a Title I Billing Statement, Form HUD 2041,

(Appendix 3, page 13) and the premium paid as billed.

\(1\) To avoid month-end accumulations and permit timely

notification to lenders of registration of loans for

insurance, lenders who use manifest-type reporting

shall submit reports daily when the volume is 14 items

or more.

\(2\) Low-volume lenders shall submit reports promptly

when 14 items have been accumulated. In any event,

regardless of the number of loans, a manifest shall

be submitted at the end of each week.

\(3\) Lenders reporting new loans by punched tabulating

cards shall submit cards promptly when a block of

approximately 200 has been accumulated. For lesser

accumulations, cards shall be submitted once each

week.

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4710.1 CHG 3

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3-3. MAILING INSTRUCTIONS. To expedite processing by HUD, cooperation

of all lenders is requested in mailing manifests, punched tabulating

cards, and reports according to the following instructions:

\* a. Manifest (Form HUD-56004) or Punched Tabulating Cards are to

be mailed to the Office of ADP Operations, Attention:

Production and Data Control Division, Department of Housing and

Urban Development, 451 Seventh Street S.W., Washington, D.C.

20410\. The cards shall be wrapped carefully in several folds

of heavy wrapping paper and tied securely with strong cord to

prevent damage or loss in shipment. Only the 7/76 revision of

the FH-4 or the 10/79 revision of the HUD-56004 shall be

used. \*

b\. Refinancing Reports (Form FH-5), Transfer of Note Reports

Form FH-6), and Transfer of Mobile Home Loans to GNMA Pool

Form HUD-676) are to be mailed to the address as shown on the

respective forms.

c\. Avoid Attachments of any kind to the Title I report forms.

Unnecessary attachments such as transmittal letters result in

delay of insurance registration, since all report forms having

attachments are set aside for special handling.

3-4. PREPARATION OF REPORTING FORMS. To minimize rejection of the

data entered into HUD\'s automatic data processing equipment, all

reports must be typed and the data carefully verified before mailing.

Lenders are particularly cautioned to insert their names,

addresses, and the correct 5 digit contract numbers on all forms

exactly as shown in the top portion of the billing statements.

Lenders reporting by punched tabulating cards must verify the data

punched into the cards before submission.

\* a. Manifest and Punched Tabulating Cards. Instructions for

preparation of the Loan Reporting Manifest (Form HUD-56004) and

the tabulating card (if this method of reporting is elected by

the lender) are provided in Appendix 3, pages 2 and 4. Only

the 7/76 revision of the FH-4 and/or the 10/79 revision of the

HUD-56004 shall be used.

\*

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4710.1 CHG 3

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b\. Refinancing Reports and Transfer of Note Reports. Instructions

for preparation of the Refinancing Report (Form FH-5)

and the Transfer of Note Report (Form FH-6) are provided in

Appendix 3, pages 6 and 8.

c\. Transfer of Mobile Home Loans to GNMA Pools. Instructions

for preparation of the Transfer of Mobile Home Loans to GNMA

\* Pool (Form HUD-676) are provided in Appendix 3, page 10. \*

3-5. CLEARANCE OF EXCEPTIONS. HUD\'s ADP Title I program will reject

a loan reported for insurance registration when the tabulating

card submitted by the lender, or the tabulating card created by

\* HUD from the manifest (Form HUD-56004) or from the Refinancing

Report (Form FH-5), contains data that is in error, incompatible,

or incomplete.

a\. New Loans Rejected are listed in the \"Exceptions Reported\"

section of the monthly statement (Form HUD-2041). Each item

in this section will be coded as to the reason for rejection.

The original reporting document, whether a tabulating card or

manifest (Form HUD-56004) is not returned to the lender. The

reason for nonacceptance may be determined by matching the

error code shown in the Insurance Charge or Reject Identification

column of the \"Exception Reported\" section with the

listing of error codes and messages on the reverse of the Form

HUD-2041 (Appendix 3, page 12). Each new loan rejected and

listed in this section shall be corrected promptly by the

lender, and the correct data shall be reported in the lender\'s

next submission of a manifest (Form HUD-56004) or tabulating

cards to obtain insurance registration. Form HUD-2041 shall \*

not be returned when resubmitting corrections.

b\. Refinanced Loans Rejected are not listed in the \"Exceptions

Reported\" section of the monthly statement. These rejects are

resolved by HUD, when possible, via telephone communication

with the lender. If HUD determines this technique is not

possible, Form FH-5 is returned to the lender for correction

and resubmission.

3-6. COMPUTATION OF TERM AND INSURANCE CHARGE. The insurance charge

for each loan is calculated by HUD and billed to the approved

lending institution on a monthly statement. The method of

computing the charge is explained in the following paragraphs.

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4710.1 CHG 3

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3-7. NEW LOANS.

a\. Term. The term of the loan, for insurance purposes, is

computed from the date of the note to the maturity date. HUD

determines the final maturity date of the loan from the

information furnished by the lender as to the date of the first

payment, the number of payments to liquidate the loan, and the

mode of payment. No charge is made for a fractional part of a

month which is 14 calendar days or less, and a charge for a

full month is made for a fractional part of a month which is

15 calendar days or more.

b\. Insurance Charge.

\(1\) Rate. The insurance charge for all mobile home related

loans is computed at the rate of fifty-four one-hundredths

(0.54) of one percent per annum of the net proceeds.

\(2\) Calculation. To obtain the total insurance charge on the

loan, the factor for 1 month, .00045000 (0.54% divided by

12), is multiplied by the amount of net proceeds, and

this result is then multiplied by the term in months.

\(3\) Billing. The total insurance charge is billed to the

lender for each loan having a duration of 25 months or

less. The insurance charge on those loans having a term

in excess of 25 months is payable in installments. Each

installment is the equivalent of the charge for one year,

except that the final installment is inclusive of any

fractional part of a year when such fractional part is 6

months or less.

\(4\) Refund or Abatement. Title I Regulations for insurance

charge refund and abatement are cited in paragraph 3-13.

c\. Due Dates. The initial insurance charge shall be paid within

25 calendar days of HUD\'s acknowledgment of the loan. The

second and succeeding installments, if any, are billed on the

first and each succeeding anniversary of the first day of the

month in which the note was dated. These installments shall

\* be paid within 25 calendar days of such billing by HUD in

order to avoid late charges (see paragraph 3-12). \*

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4710.1 CHG 3

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d\. Example. A Mobile Home Loan with proceeds to the borrower of

\$12,500 is dated January 20, 1978 and matures on February 20,

1990\.

TERM IN INSURANCE

PERIOD MONTHS CHARGE

Payable within 25 calendar days after acknowledgement:

1-20-78/1-20-79 12 \$67.50

1-20-79/1-20-80 12 67.50

1-20-80/1-20-81 12 67.50

1-20-81/1-20-82 12 67.50

1-20-82/1-20-83 12 67.50

Payable within 25 calendar days after billing:

1-20-83/1-20-84 12 67.50

1-20-84/1-20-85 12 67.50

1-20-85/1-20-86 12 67.50

1-20-86/1-20-87 12 67.50

1-20-87/1-20-88 12 67.50

1-20-88/1-20-89 12 67.50

1-20-89/1-20-90 13 73.13

3-8. REFINANCING. The adjusted insurance charge in a refinancing

transaction is the amount due HUD on the new note after credit has

been allowed for the unearned charge paid on the loan being

refinanced. MOBILE HOME LOT LOANS AND COMBINATION LOANS ARE NOT

ELIGIBLE FOR REFINANCING. The computation of the credit for the

unearned charge of a mobile home loan being refinanced is explained

below.

a\. Unearned Charge. The unearned charge in a refinancing

transaction is established by first determining the earned Charge

then subtracting that amount from the total charges paid.

Detailed steps to be taken in determining the unearned charge

are as follows:

\(1\) Count the number of months between the date of the note

being refinanced (old note) and the date of the

refinancing note (new note) to obtain the number of

earned insurance charge months.

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4710.1 CHG 3

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\(2\) Multiply the monthly insurance charge factor times the

number of months for which insurance charges are earned

(see (1) above) times the amount of proceeds of the note

being refinanced (old note) to obtain the amount of

earned insurance charge.

\(3\) Deduct the amount of earned insurance charges (see (2)

above) from the total insurance charges paid to obtain

the amount of credit (unearned charge) due on the

refinancing note. The ADP System automatically credits this

amount to the insurance charge due on the new note, and

bills the lender a net charge. See Appendix 3, page 13.

When withholding insurance charges on a refinanced loan,

which appears under the Initial Billing Section of Form

\* HUD-2041, deduct the net charge (not the gross charge) \*

for the note.

b\. Example. A Mobile Home Loan dated August 10, 1975, for a term

of 10 years, with loan proceeds of \$9,500, was charged a per

annum insurance rate of 0.54% (monthly factor .00045000). The

refinanced note was dated March 10, 1978. The period for

which insurance charges were billed and paid for the old note

is 36 months. For ADP purposes, all months contain 30

calendar days.

\(1\) Month Day Year

15 77

Date of New Note 03 10 78

Date of Old Note 08 10 75

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7 0 02 = 31 Earned Insurance

Charge Months

Full Term 120 months

Earned Term (calculated above) -31 months

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Unearned Term 89 months

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4710.1 CHG 3

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\(2\) Earned Insurance Earned Insurance

Monthly Factor Charge Months Proceeds Charge

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.00045000 X 31 X \$9,500 = \$132.53

\(3\) Total Insurance Charges Paid (3 X \$51.30) \$153.90

Earned Insurance Charges -132.53

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Unearned Insurance Charges 21.37

3-9. INSURANCE CHARGE PAYMENT. The insurance charge is billed to

the approved lending institution on a monthly statement, Form

\* HUD-2041 (Appendix 3, pages 13 through 19) which includes all \*

insurance charges due. The billing statement also includes

other data related to the lenders Title I needs. Features of

the billing statement are:

a\. Initial Billing Section. An insurance charge listed in this

section constitutes HUD\'s acknowledgment to the lender of

loans accepted for insurance and itemizes insurance charges

now due. All charges are made in accordance with the HUD

Title I Regulations. Final insurance registration of these

loans is dependent upon payment of the insurance charge

\* within 25 calendar days after the date of the Form HUD-2041. \*

(See Appendix 3, page 13.)

b\. Renewal Billings Section. An insurance charge listed in this

section represents the second or subsequent installment

insurance charge for each previously registered loan having

a duration in excess of 25 months and for which a renewal

insurance charge is due. (See Appendix 3, page 14.)

c\. Special Billing Section. Any corrective adjustments

necessary as a result of an erroneous billing statement

(overstated, understated, or adjusted reserve balance) are

listed in this section. Also included in this section are

insurance charges withheld by the lending institution under

Schedule 1 or 2 of a previous month\'s reconcilement form

(see paragraph 3-11) which HUD deems valid and collectible.

(See Appendix 3, page 15.)

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4710.1 CHG 3

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d\. Claims Section. This section lists claims paid, supplemental

claims paid, and repurchases. Once a claim is listed in

this section, the lending institution is no longer holder of

the obligation. (See Appendix 3, page 16.) Any further

payments received on account by the lender after assignment

of the claim must be made payable to the Department of

Housing and Urban Development and immediately transmitted to

\* Mortgage Insurance Accounting and Servicing Group, Insurance

Accounting Division, Attention: Cash and Securities Section,

Department of Housing and Urban Development, 451 Seventh

Street S. W., Washington, D. C., 20410. \*

e\. Summary Section. This section contains several beneficial

features carefully prepared as a necessary aid to the lender.

These features include:

\(1\) Cumulative net total of monthly insurance charges billed.

\(2\) The up-to-date net balance for each primary or earmarked

insurance reserve which had activity during the previous

month. In addition, each year the October 1 billing

statements are mailed to all active Title I lenders in

order to display the balance for each insurance reserve

as of September 30. (See 24 CFR Part 201.12 of the HUD

Regulations for Title I Insurance Reserve provisions.)

\(3\) The net balance of all claims paid or repurchased during

a prior billing cycle. (See Appendix 3, page 17.)

f\. Return Sheet. Total insurance charges billed for the month

are provided in this sheet. Detach this sheet from the other

sections and return to HUD with the lender\'s remittance check.

\(1\) If deductions have been made from the total billed, the

lender shall indicate that amount in the space provided

on the \"Return Sheet.\" (See Appendix 3, page 18.)

\(2\) Reconcilement of Insurance Charges, Form HUD-646 (see

Appendix 3, pages 20 and 21), must also be completed and

attached if there are loans to be reported as outlined

in paragraph 3-11.

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4710.1 CHG 3

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g\. Exceptions Reported. Rejected loans reported in this section

shall be corrected and promptly resubmitted. (See paragraph

3-5.) DO NOT return the \"Exceptions Reported\" sheet with the

\* Form HUD-56004 when resubmitting. (See Appendix 3, page 19.) \*

3-10. HUD ASSIGNED NUMBERS. Lender Contract Numbers and Title I Loan

Numbers are assigned by HUD. If, at any time, the lending

institution finds it necessary to correspond with HUD, the Lender

Contract Number and the Title I Loan Number (if concerning an

acknowledged loan) must be included.

a\. Lender Contract Number. Upon acceptance of a financial

institution as a HUD-approved Title I Lender, a contract

and an acceptance letter are prepared by HUD and forwarded

to the approved lender. It is at this time that the lender

is first made aware of the 5-digit Contract Number with HUD.

It is extremely important that the Contract Number of the

insured institution is shown correctly on all documents to

HUD, especially documents reporting loan information since

that information will be used as direct input for HUD\'s

automated system.

b\. Title I Loan Number (previously FHA Loan Number). Each

loan acknowledged for insurance is assigned a loan number

by HUD. Any number assigned having less than 7-digits must

be left justified with zeros. Example: Title I Loan No.

1234 shall be shown as 0001234. The loan number appears

each time a particular loan is referenced on a billing

statement. In case of a refinancing, a new loan number is

assigned to the new note.

3-11. RECONCILEMENT FORM. Title I Monthly Statement - Reconcilement

of Insurance Charges, Form HUD-646 (Appendix 3, pages 20 and 21),

must be completed and submitted with the remittance check and

\* the \"Return Sheet\" of Form HUD-2041 if: (1) an amount other \*

than the exact amount of the total insurance charges billed is

remitted \-- the deductions to be shown under Schedules 1 and 2;

or (2) there are loans to be reported in the categories covered

by Schedules 3, 4, or 5. If the exact amount of insurance

charges billed is remitted, and there are no loans to be reported

in any of the above mentioned schedules, only the \"Return Sheet\"

need accompany the remittance check. The reconcilement form

shall be signed by an authorized official of the insured institution.

Facsimile signatures are acceptable. Instructions for

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4710.1 CHG 3

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(3-11)

completion of Schedules 1 through 5 of Form HUD-646, as

applicable, are set forth below.

a\. Withholding on Prepaid Loans - Schedule 1. Any deductions

made from the billing under Schedule 1 of the reconcilement

form must relate to loans appearing in the particular statement

being reconciled, and only for loans which have been

prepaid in full prior to or within 25 calendar days after the

\* date of the monthly statement being reconciled. Do not

withhold remittance on loans which have been refinanced and

have been or will be refunded as a credit of the unearned

insurance charge on a subsequent monthly statement. \*

b\. Withholding for Other Reasons - Schedule 2. Any insurance

charge withheld for other reasons shall be listed in

Schedule 2, giving the reason for withholding payment.

\(1\) Such reasons included loans acknowledged to the institution

\* in error, and loans found to be ineligible duplicate

insuring of loans, for insurance. \*

\(2\) Deductions must not be made in Schedule 1 or 2 for

insurance charges on loans which have been refinanced

\* and have been or will be reported to HUD. The \*

withholding of such insurance charges will result in an

automatic cancellation of the loan insurance.

\(3\) The unearned portion of the insurance charges paid is

refunded as a credit when the refinancing is acknowledged

on a subsequent statement.

c\. Differences in Loans Listed on Current Monthly Statement

Schedule 3. All loans for which the \"net proceeds\" or the

\"term in months\" is incorrectly stated on the Current

monthly statement shall be listed under Schedule 3. The

remittance must not be adjusted by any differences shown

in this schedule. A subsequent statement will reflect any

corrections or adjustments necessary for these items.

d\. Loans Reported but Not Shown on Monthly Statement-Schedules

4 and 5. Each new and refinanced loan which was

reported 60 calendar days or more prior to the date of the

current monthly statement, but has not been acknowledged by

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4710.1 CHG 3

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HUD on a monthly statement shall be listed under Schedules 4

and 5, as applicable.

\(1\) The lender shall resubmit those new loans listed in

Schedule 4 on its next manifest or include them in

its next submission of punched tabulating cards.

\(2\) Refinanced loans included in Schedule 5 shall be

resubmitted on Form FH-5.

\(3\) It is of utmost importance that all unacknowledged

loans continue to be listed in Schedules 4 and 5

until they are acknowledged on a monthly statement.

\(4\) Proper adherence to the procedures in this subparagraph

precludes the denial of a claim for payment by

HUD because the loan had not been acknowledged for

insurance.

\*

3.12. LATE CHARGES ON INSURANCE CHARGES. HUD regulations require

lenders to pay a late charge of 4% on the amount of their

payment to HUD for insurance charges if paid more than 25

calendar days after the acknowledgment (new loans) or billing

date (renewal and other loans) as shown on Form HUD-2041.

a\. No late charge will be required with respect to any loan

which HUD fails to render a proper billing (Form HUD-2041)

to the lender. No late charges will be imposed on any

loan listed under Schedules 1, 2, 4, and 5 of the Title I

Monthly Statement\--Reconcilement of Insurance Charges,

Form HUD-646.

b\. The postmark date of the postal service on the envelope in

which the remittance is mailed will be accepted by HUD as

the date payment is made by the lender.

c\. Lenders will compute the late charge on the total amount

due HUD after performing the reconcilement or on the amount

billed, if paying as billed, when payment is not made within

25 calendar days after acknowledgement of billing date. If

amounts are deducted from the billing during the reconcilement

process, and HUD determines, through its research that the

billing was proper, the late charge will be due.

\*

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4710.1 CHG 3

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\* d. Show the amount of late charge, if due, on the Form HUD-646

and the \"Return Sheet\" of the Form HUD-2041 (see Appendix 3,

pages 14, 16 & 17).

\(1\) If no exceptions are taken, the late charge calculation

shall be as follows: Total Insurance Charges Billed as

shown on the \"Return Sheet\" of the HUD-2041 multiplied

by four percent (.04).

\(2\) If exceptions are taken, the late charge calculation

shall be as follows: Total Insurance Charges Billed

as shown on the \"Return Sheet\" of the HUD-2041, less

the total of the exceptions as listed in schedules

1 and 2 of the HUD-646, multiplied by four percent

(.04).

e\. When the late charge (as calculated above) is added to the

total bill or the total bill less exceptions, the sum will

represent the total amount due HUD. Lenders should issue

one check for the total amount due HUD.

f\. THE LATE CHARGE SHALL NOT BE PASSED ON TO THE BORROWER. \*

3-13. REFUND OR ABATEMENT. The Title I Regulations provide that there

shall be no refund or abatement of any portion or installment of

the insurance charge except:

a\. The charge on a refinanced note may be credited with the

unearned portion of the paid charge, and future renewal

premiums remaining on the original note will be abated;

b\. Insurance charges falling due after the claim is filed or

the note is prepaid in full;

c\. The charge paid on a loan or portion thereof which is found

to be ineligible; but no refund is made unless a claim is

denied by the Federal Housing Commissioner or the ineligibility

is reported by the insured promptly upon discovery and

an application for refund made. In no event shall charges be

refunded where the application for refund is not made until

after the loan is paid in full.

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4710.1 CHG 3

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3-14. LOAN ACKNOWLEDGMENT DATE. The date of the monthly statement on

which HUD lists the initial insurance charge for a loan is the

\"loan acknowledgment date.\" This date is necessary on all

Refinancing Reports (FH-5), Transfer of Note Reports (FH-6), and

\* Title I Claim for Loss Reports (FH-7) or (HUD-637A). Since \*

individual loan reports are not maintained in HUD files, lenders

must note the acknowledgment date on the loan jacket or other

appropriate document.

a\. Such notation will make this date easily accessible to the

lender to allow expeditious reconcilement on monthly insurance

charge statements, thus assuring that all loans have

been acknowledged for insurance.

b\. The notation also precludes the possibility of denial of a

claim for insurance benefits by reason of the lender not

being in a position to furnish the required data on the

claim form.

c\. If the above forms are submitted to HUD without showing the

dates of the actions, they will be returned to the lender

for correction and resubmission.

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