HUD Streamlines Mortgage Insurance Certificate Process
WASHINGTON - The U.S. Department of Housing and Urban Development on Oct. 20 announced that it will no longer issue paper Mortgage Insurance Certificates (MIC) with the endorsement of a single family mortgage for insurance. The agency said the decision "is another step in the Department's initiative to expand its use of e-commerce through carefully controlled electronic transactions that reduce costs and streamline processes." In making the announcement at the Mortgage Bankers Association Annual Convention, Federal Housing Commissioner John Weicher said, "Eliminating paper Mortgage Insurance Certificates will benefit the lending industry as well as HUD. The new electronic process will not only save time and reduce paperwork, it will produce savings to the industry and the Department." HUD issued more than 1.3 million original paper MICs over the last 12 months along with about 700,000 duplicates. By discontinuing the issuance of paper MICs, HUD estimates the mortgage lending industry will save $80 million in the coming year alone, and the change should generate a savings to the Department of close to $10 million. In addition to helping originating lenders, HUD said the action will benefit servicers and holders of FHA mortgages. HUD previously required the original paper MIC or a paper duplicate to be submitted to the Department when a lender filed a claim on defaulted mortgages. The Department will discontinue this requirement, allowing lenders to stop the staff-intensive process of ordering and tracking the receipt of the duplicate paper MICs.