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Greetings!
In my article, entitled FHA Issues
Guidance for Lender Approvals (July 2010, National Mortgage
Professional Magazine), I discussed the many changes that would
be required pursuant to Mortgagee Letter 2010-20.
This ML, issued on June 11, 2010, outlines some of the most
important revisions that HUD-FHA has made to its single family loan
origination program and contained the long-awaited guidance
regarding the implementation of its Final Rule. That Final Rule
adopted changes pertaining to the approval of mortgage lenders by
the Federal Housing Administration (FHA) that are designed to
strengthen FHA by improving its management of risk.
If your organization has not drafted and begun implementing
policies and procedures to comply with Mortgage Letter 2010-20, I
highly urge you to do so immediately.
After December 31, 2010, loan correspondents (i.e., Third-Party
Originators, so-called "TPO"s) will only be permitted to continue
participation in FHA programs by establishing a sponsorship
relationship with an FHA-approved mortgagee. Indeed, loan
correspondents will no longer have access to non-public FHA
systems, beginning January 1, 2011 (i.e., FHA Connection). Only
FHA-approved mortgagees will be permitted to order FHA case numbers
from the FHA Connection. HUD will provide future guidance, with
respect to the processing of case
numbers ordered prior to the January 1, 2011.
Mortgagee Letter 2010-33 has been expected. It describes the system
enhancements to FHA Connection, providing notice to mortgagees who
are sponsors ("Sponsoring Mortgagees') of sponsored third party
originators ("Sponsored Originators") of new FHA Connection data
submission requirements as was announced in Mortgagee Letter
2010-20.
For transactions originated by an FHA-approved loan correspondent,
mortgagees should follow the current process through December 31,
2010.
FHA Connection enhancements will be implemented on October 4, 2010, and
sponsoring mortgagees must begin complying with the new data entry
requirements on that date.
Best regards,
Jonathan
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Highlights
EFFECTIVE
DATES
On
or After October 4, 2010
- All required sponsored origination data fields must be
completed on assigned case numbers assigned.
- Sponsoring mortgagees will no longer enter their 10 digit FHA
ID in the FHA Connection as the loan originator for loans involving
a sponsored originator, as previously advised in Mortgagee Letter
2010-20, as a temporary workaround pending this system enhancement
release.
- For mortgagees using B2G (FHA Connection Business to
Government) that are unable to modify their systems to accommodate
the transmission of the Employer Identification Number (EIN) by
October 4, 2010, the FHA Connection Case Number Assignment screen
must be used to order a case number for sponsored originator
transactions.
- The modified HUD/VA Addendum to the Uniform Residential Loan
Application (92900-A) is required for all applications.
Until
January 1, 2011
- For loan originations not involving a sponsored originator, FHA
mortgagees may use the prior version of the 92900-A (dated 5/2008)
until January 1, 2011.
As of January 1,
2011
- The FHA-approved loan correspondent program will no longer be
available, and B2G mortgagees must comply with new systems
requirements to support collection of sponsored originator data.
Only FHA-approved entities will have direct access to FHA
Connection.
SYSTEM AND SCREEN
CHANGES
- New Sponsored Originator Maintenance Screen Modified Case
Number Assignment Screen
- Modified Case Transfer Screen
- Modified Insurance Application and HECM Insurance Application
Screens
- Modified Case Query Screen
- Viewing Sponsored Originator Performance in Neighborhood
Watch
- FHA TOTAL Scorecard Changes
FORM CHANGE AND NEW SIGNATURE
COMPLIANCE
HUD/VA Addendum to Uniform
Residential Loan Application (92900-A)
- Modified on page 3 to capture necessary information for
sponsored originators, as follows:
-
- Loan Origination Company - Entity's Legal Name of the
originating mortgagee
- Loan Origination Company Tax ID -- Employer Identification
Number issued by the Internal Revenue Service (IRS)
- NMLS ID of the Loan Origination Company - The unique identifier
of the company, if licensed with NMLS
- For those loans originated by a sponsored originator, the
sponsoring mortgagee must enter its name and address in block 15 on
pages 1 and 3. Directly below block 15 on page 3 are the new fields
the mortgagee must enter for capturing the sponsored origination
information described above.
- The revised form 92900-A (dated 9/2010) must be used for all
loan applications taken by a sponsored originator on or after
October 4, 2010.
- For loan originations not involving a sponsored originator, FHA
mortgagees may use the prior version of the 92900-A (dated 5/2008)
until January 1, 2011.
Uniform
Residential Loan Application
- On the Universal Residential
Loan Application (URLA), the actual interviewer's name,
signature and telephone number must appear on page 4,
regardless of who employs the interviewer (e.g., a sponsored
originator).
- While common practice in the
industry is for the interviewer to also sign page 1 of the 92900-A,
if a sponsored originator is involved, it is now required that
the sponsoring mortgagee
must sign and date page 1 of the URLA.
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Visit
Library for Issuance
FHA Connection Enhancements to Support Sponsored Third Party
Originations (Sponsored Originations), Mortgagee Letter
2010-33,
September 21, 2010
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This communication is sent to our valued clients and colleagues,
who regularly receive our Advisory Bulletins, Mortgage Compliance Updates,
and Compliance
Alerts.
These publications are free to subscribers. Information contained
herein is not intended to be and is not a source of legal
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� 2007-2010 Lenders Compliance Group, Inc. All Rights
Reserved.
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