The Federal Housing Administration implemented its Defect Taxonomy Version 2, effective for loan reviews beginning Wednesday, January 1, 2020. The new version includes various updates to the Defect Taxonomy originally implemented through the Loan Review System (LRS) in 2017.
The posting of Defect Taxonomy Version 2 on the Loan Review System webpage was first announced in FHA INFO 19-55 on October 28, 2019. It is one of several important milestone achievements in FHA’s efforts to provide greater clarity and consistency for lenders.
Additionally, recent changes to LRS now allow lenders to submit optional responses to Tier 3 and 4 deficient findings, as well as Tier 1 and 2 findings that FHA has mitigated or remediated.
FHA’s Defect Taxonomy Version 2 and an updated LRS User Manual can be accessed from the Loan Review System webpage on HUD.gov.
On Wednesday, January 8, 2020, FHA’s Office of Lender Activities and Program Compliance will host a free, live webinar from 2:30 pm to 4:00 pm to provide updates about FHA’s quality assurance processes including the Defect Taxonomy Version 2 and LRS enhancements. You can register for the webinar at https://easthillmedia.zoom.us/webinar/register/WN_yx1doYDPTYKSlPbisyhKwA