3Q Loan-File Reviews Initially Reject 48% of Loans
January 3, 2014
Approximately 48 percent of FHA loans that underwent post-endorsement review by the FHA in the third quarter of 2013 received an unacceptable rating a commonly high percentage of deficient FHA-insured loans that lenders could lower through mitigation. The FHA reviewed 6,692 FHA-insured loans between July 1 and Sept. 30, 70 percent of which were home-purchase loans, 25 percent streamline refinancings, and 5 percent rate and term refis. Of the total loans analyzed, 36 percent had certain deficiencies, 19 percent showed early payment default (EPD), and only 16 percent met FHA underwriting standards, according to the agencys latest report on loan-file review findings.