December 4, 2020

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FHA and HUD Announce New Automated Loan Processing System

FHA/HUD

The Federal Housing Administration has announced a new automated underwriting system for use by participating lenders who process FHA Single-Family home loans.

The new system allows lenders to electronically submit loan application data for single family forward mortgages directly to tbe FHA and, “receive mortgage insurance eligibility scoring decisions generated from FHA’s Total Mortgage Scorecard.

“The launch of FHA’s first direct automated underwriting system is a huge milestone for the over one million borrowers on average who rely on FHA insurance annually,” according to Assistant Secretary for Housing and Federal Housing Commissioner Dana Wade, who was quoted in an FHA press release.

Wade adds, “We’re excited to deliver this enhanced automated underwriting capability specifically for FHA-insured lending because it will streamline processes for everyone, including consumers.”

This new system has features including providing, “Detailed feedback certificates that provide specific and actionable information for lenders that corresponds with FHA policies in the Single Family Housing Policy Handbook 4000.1.

It also allows for “integrated submission of credit report data reissuances” which ends the need for FHA lenders to rely on third-party routing systems. The new features also included more efficient data sync between lenders and the FHA.

“When coupled with our recent launch of FHA Catalyst Electronic Appraisal Delivery capabilities, the new AUS adds to the core pieces we need in order to deliver a fully consolidated FHA case record, with all loan and borrower data in one place,” said Deputy Assistant Secretary for Single Family Housing Joe Gormley who was also quoted in the FHA press release.

The new system is available for forward mortgages starting October 30, 2020.

The FHA official site advises that participating FHA lenders will not be required “to replace lender use of other automated underwriting systems that accommodate FHA-insured mortgages through interfaces with FHA’s TOTAL Mortgage Scorecard.”

FHA Catalyst is FHA’s multi-year technology modernization initiative and is supported by a $40 million appropriation from Congress. The FHA official site describes it as a secure cloud-based platform offering an upgraded automated process for lenders.

More information is available on using or adapting the system at the FHA official site.

Joe Wallace - Staff Writer

By Joe Wallace

October 21, 2020

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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