The FHA rarely talks about its lender and loan review process in detail but in the latest issue of Lender Insight the agency discusses how it is done and how it selects targets for each review. FHA’s overall counterparty quality-control efforts are divided into lender-monitoring reviews, nonperforming loan reviews, post-endorsement technical reviews of performing loans, post-endorsement technical reviews of early payment defaults (EPD), early cohort claim reviews and lender self-reports. For lender-monitoring reviews, the FHA uses a targeting methodology that takes into account loan volume, default/claim rates, participation in specific FHA loan programs, servicer loss-mitigation performance and certain other factors. Loans are selected to determine compliance with FHA requirements. The Quality Assurance Division (QAD) in the Department of Housing and Urban Development’s Single-Family ...