FHA Home Loans Refinancing

FAQ – Underwriting for FHA Loans

11.26.08

QUESTION: How is credit approval being defined for FHA mortgage lenders?

ANSWER:  Credit approval is defined for loans scored through FHA’s Mortgage Scorecard TOTAL as Accept/Approve on or after October 1, 2008. For those home loans manually underwritten, credit approval is defined as the date the Direct Endorsement Underwriter approves the loan, as indicated by the DE signature on the Mortgage Credit Analysis Worksheet (MCAW) or L1008 oan Transmittal form.

QUESTION: What if we re-score the loan through an AUS/TOTAL?

ANSWER:  For those FHA loans that are re-scored and result in a downgrade to Refer — requiring the lender to manually underwrite the loan — credit approval is defined as the date the Direct Endorsement Underwriter approves the loan, as indicated by the DE signature on the MCAW or LT. For those loans that are re-scored and remain an Accept/Approve, the date of the last scoring would be the date used to determine the credit approval.

QUESTION: How will this change affect systems such as FHA Connection?

ANSWER:  Hard system edits will be implemented to facilitate the implementation of this new prohibition.

QUESTION: What if the credit was approved prior to October 1, 2008 but the loan closes after October 1, 2008? Is it eligible for insurance?

ANSWER:  Yes, so long as the credit was approved before October 1, the home loan is insurable.

QUESTION: Can municipalities and other government agencies continue to offer down payment assistance loans after October 1?

ANSWER:  Yes, provided that the assistance is in the form of a second mortgage. There is no combined loan to value restriction, where a 2nd mortgage is provided by a government agency.    Information source – Mortgage Bankers Association

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[...] The rest is here: FHA Home Loan News, Mortgage Refinancing » FAQ – Underwriting for … [...]

Interest rates continue to decline and we have found that the revised FHA Hope for Homeowners programs to offer more benefits to distressed borrowers looking to avoid foreclosure.





 

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