FHA Loan Review System is back online after April outage

The LRS had been inactive since mid-April due to reported document errors, and some technical issues still remain after coming back online

The Federal Housing Administration (FHA) on Monday announced that access to the agency’s Loan Review System (LRS) has been restored, after having been inaccessible for several weeks beginning on April 11. This is according to FHA INFO 2022-43.

“Today, access to the [FHA LRS] was restored after it was temporarily shut down while system teams worked to resolve various document errors,” the notice reads. “FHA has reverted review levels and reset response due dates to minimize the impact on lenders and FHA staff. The system shutdown reduced the number of active reviews that require resubmission of response documents; however, lenders may need to resubmit documents for some cases.”

Affected users of such systems are recommended to clear their internet browser’s cache to refresh certain connections with new data when accessing the LRS, the notice reads.

The agency was unable to revert lender monitoring reviews and “some additional loan reviews” due to certain technical limitations, the agency said. In those instances, FHA will work with individual affected lenders to make “appropriate adjustments,” the notice said. Lenders who have any other requests stemming from the recent outage are directed to contact the FHA Resource Center.

Certain issues of document access remain, the agency added.

“Although LRS errors have been resolved for new document uploads, lenders and FHA staff are still unable to access most documents submitted prior to the shutdown,” FHA explains. “System teams will continue to work on a comprehensive solution that restores access to all documents in LRS.”

The LRS was announced in 2017 as a new tool meant to manage quality control functions for FHA Title II Single Family loan programs, including the Home Equity Conversion Mortgage (HECM) program. The LRS unifies various loan review processes that previously fell under either the Quality Assurance Division or the Processing and Underwriting Division in each of FHA’s homeownership centers, and allows HUD to implement FHA’s Defect Taxonomy, a simpler, more user-friendly rating system for documenting the results of loan reviews.

“Our various quality control efforts help us to ensure that lenders comply with FHA guidelines, which are designed to protect the insurance fund and borrowers,” LRS project manager Jack Higgins, now FHA’s director of quality assurance, told RMD in early 2017. “We’re also constantly working to strike the right balance—making sure that our compliance and enforcement efforts are appropriate while maintaining access to credit for qualified borrowers.”

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