The Federal Housing Administration is implementing a Loan Review System that provides an electronic platform for FHA loan-level file reviews and other quality control functions for Title II Single Family mortgages. The news was announced yesterday in Mortgagee Letter 2017-03.
HUD states that as system development is ongoing, the effective date will be confirmed in a subsequent mortgagee letter but will be no earlier than March 1, 2017. While HECMs are not specifically mentioned in ML 2017-03, NRMLA’s outside legal counsel Jim Milano reminds us that this guidance applies to all Mortgagees approved for FHA Title II Single Family programs. The HECM statute, section 255 of the National Housing Act (codified at 12 USC 1715z-20), falls within Title II.
Under this initiative, HUD plans to implement a new Loan Review System, which will be used to manage Title II Single Family Loan Reviews, Title II Single Family Mortgagee Monitoring Reviews and Mortgagee self-reporting of fraud, misrepresentation and other material findings.
The Loan Review System builds on recent efforts by FHA to align the documentation of loan review results across various divisions, and it incorporates the Single Family Housing Loan Quality Assessment Methodology (Defect Taxonomy) announced on June 18, 2015.
Loan Review System Live Webinar
FHA will host a live, online webinar for mortgagees that will provide an overview of both Loan Review System functionality and related process changes. This is the first in a planned series of webinars for mortgagees that will be held over the coming months. Dates and times for additional Loan Review System webinars will be announced in the future and will build upon the overview information to be provided in this webinar.
- Loan Review System: Implementation and Process Changes, January 26, 2017, 2:00 PM – 3:00 PM (Eastern). You must register to attend this free, online webinar. Attendees will receive the link to access the webinar with their registration confirmation. To participate in the live Questions and Answers session during this webinar, attendees will also need to dial in using the following:
Dial-in Number: 866-233-3841
Access Code: 415535
Although open to all stakeholders, this webinar is ideal for all quality control, compliance and risk management staff.