HUD highlights system changes regarding third-party origination
The Department of Housing and Urban Development today hosted a webinar to guide lenders through changes in data requirements associated with originating a loan backed by the Federal Housing Administration through a sponsored originator. A sponsored originator is a third party underwriter, outsourced by a lender to specifically take care of the origination process. Sponsored originators are not FHA-approved individuals, but instead work with lenders who are approved by the FHA. Although they originate FHA-backed loans, they are not granted access to any FHA non-public systems, including the FHA Connection for example. HUD updated its many of its online systems to incorporate features regarding sponsored originators. For example, there is now a maintenance page with a list of active sponsored originators that lenders can use as an outsourcing tool. Originators on that list have no jurisdiction and can therefore be ordered to a case anywhere in the country. If an originator that a lender wants to use is not on the list, they can add him. Information such as the originator's nine-digits employer identification number, contact information and their company name are required to register. The originator's National Multiple Listing Service number can be entered, but is not required. Originators must be registered on the maintenance page to be eligible for work as a sponsored originator for an FHA loan. An originator is ineligible if their status has been terminated by HUD. HUD revised form 92900A by adding additional fields with respect to sponsored originators. If a lender is using a sponsored originator, they must use the revised form which includes additional fields to specify the originator's company, identification numbers and name. The FHA Connection, a government website that connects FHA-approved lenders directly and securely with business partners, has also adapted to the use of sponsored originators. In building a loan case file, lenders must provide the above listed information. If the case is already made, the information fields will automatically be filled in upon reopening the case file. If a lender wants to switch to or from employing a sponsored originator, they must use the 'case transfer' option. They cannot make that change from within the case file. The HUD scorecard is now updated to version 2.3, which scores loan requests based on new mitigation factors. The webinar gave no other details about the score requirements, except that loans that need to be reevaluated will be scored according to the new guidelines. All policy changes are set to go into effect Oct. 4 and apply to loans originated on or after that date. The webinar spokespeople made an important note that rules to loan correspondent and the loan agent programs will not changed. After Jan. 1, 2011, the loan correspondent program will no longer be available. Sponsored origination will become the replacement system. Write to Christine Ricciardi.