Users regained access to the agency’s Loan Review System after it was temporarily shut down for four days last month due to server errors. Efforts to fix the problem resulted in loss of data and documents.
Legislation has been introduced in the House and Senate to help prevent FHA foreclosures by increasing oversight of mortgage servicers to ensure they are complying with loss-mitigation requirements.
Trade groups are asking HUD to eliminate the FHA certifications entirely or replace them with language indicating a lender acknowledges key FHA requirements based on loan eligibility.
HECM endorsement volume rose in the first quarter of 2019 after three quarters of declining originations. FHA attributed the increase to the partial government shutdown that lasted 35 days, delaying HECM endorsements for part of the first quarter.
The Structured Finance Industry Group is backing an FHA proposal to revise its annual loan-level certifications and defect taxonomy and a Ginnie Mae proposal on high-risk cash-out refinance loans and erratic prepayment speeds.
Many of the loans with lower credit scores and higher debt-to-income ratios that get flagged for manual underwriting under FHA’s revised Technology Open to Approved Lenders (TOTAL) Mortgage Scorecard likely will not get endorsed, analysts said. [Includes one data chart.]
In an effort to streamline its lending process, the FHA has scrapped the requirement of a 10-year protection plan for newly constructed single-family homes, according to guidelines released this week.
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