FHA Temporarily Halts Loan Review System – NMP

0

The Federal Housing Administration (FHA) has shut down its digital Loan Review System (LRS) for up to two weeks in an effort to resolve “various document errors” that have occurred recently, the agency said Monday.

According to an FHA press release, LRS users “have encountered various document errors over the past few weeks. Efforts to resolve the errors have had mixed results.

On Monday, LRS was temporarily shut down while system teams worked to resolve the issue. The FHA said the shutdown will minimize the need for lenders to resubmit response documents after errors are resolved.

The FHA said it expects access to the system to be restored no later than Monday, April 25.

LRS is FHA’s newest technology to facilitate lenders’ business dealings with the agency. According to information on the US Department of Housing and Urban Development’s website, “LRS is an electronic platform that provides a more accurate and transparent methodology for FHA loan reviews for Single Family Title II mortgages.”

He continues, “Because it automates many manual processes and consolidates functions previously performed in multiple systems, LRS streamlines quality control processes for lenders and FHA.”

Lenders use LRS to interact with the FHA on the majority of Title II single-family home quality control processes, including:

  • Various post-approval loan reviews;
  • Unconditional direct approval authority test case;
  • Follow-up reviews of lenders, and
  • Lender’s report of fraud and other material findings.

The FHA has stated that LRS enables it to implement the Loan Quality Rating Methodology for Single-Family Dwellings (Default Taxonomy), which was posted on HUD.gov in June 2015. The Default Taxonomy provides a simplified method of identifying and capturing information on defaults revealed by individual loan reviews. .

Using LRS, exam results will be presented using:

  • Fault categories supported by reason codes that identify the source and cause of the fault, and provide insight into the importance of a given fault within each category.
  • Severity levels that communicate the severity of the defect. Severity is determined by the size and nature of the deviation from FHA requirements and the impact on the insurability of the loan.

The FHA said it will reset response due dates and make other “appropriate adjustments” to “ensure lenders are not impacted by the outage.”

Once LRS access is restored, the FHA said, lenders with specific requests should contact its resource center. The FHA has provided the following information about its resource center;

  • For answers to frequently asked questions 24 hours a day, 7 days a week, visit www.hud.gov/answers.
  • E-mail [email protected] Emails and phone messages will be answered during regular business hours, 8:00 a.m. to 8:00 p.m. (Eastern Time), Monday through Friday, all non-federal holidays.
  • Dial 1-800-CALLFHA (1-800-225-5342). People with hearing or speech disabilities can reach this number by calling the Federal Relay Service at 1-800-877-8339.
Share.

Comments are closed.