FHA Single Family Housing Policy Handbook TABLE OF ...

FHA Single Family Housing Policy Handbook Table of Contents

1

FHA Single Family Housing Policy Handbook

2

TABLE OF CONTENTS

3 I. DOING BUSINESS WITH FHA.......................................................................1

4 A. FHA LENDERS AND MORTGAGEES .............................................................................. 1

5 1. Types of Program Approvals .................................................................................................... 1

6

a. Title I................................................................................................................................... 1

7 2. Types of Approved Mortgagees................................................................................................ 2

8 3. Application and Eligibility Requirements for Approval........................................................... 2

9 4. Branch Offices .......................................................................................................................... 2

10 5. Supplemental Mortgagee Authorities ....................................................................................... 2

11

a. Title II Direct Endorsement Authority................................................................................ 2

12

b. Title II Single Family Lender Insurance Authority ............................................................ 2

13

c. Title I Manufactured Housing Loan Direct Endorsement Authority.................................. 2

14 B. OTHER PARTICIPANTS ..................................................................................................... 9

15 1. Appraisers ................................................................................................................................. 9

16

a. Real Estate Appraisers ........................................................................................................ 9

17

b. Chattel Appraisers (for Title I Loans)................................................................................. 9

18 2. 203(k) Consultants .................................................................................................................. 13

19 3. Direct Endorsement Underwriters .......................................................................................... 13

20 4. Nonprofits and Governmental Entities ................................................................................... 13

21 5. Real Estate Brokers................................................................................................................. 13

22 6. Closing Agents........................................................................................................................ 13

23 7. Title I Property Improvement Dealers .................................................................................... 13

24 8. Title I Manufactured Home Dealers ....................................................................................... 13

25 II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT ..........14

26 A. TITLE II INSURED HOUSING PROGRAMS FORWARD MORTGAGES ............... 14

27 B. TITLE II INSURED HOUSING PROGRAMS REVERSE MORTGAGES.................. 14

28 C. CONDOMINIUM PROJECT APPROVALS .................................................................... 14

29 D. APPRAISER AND PROPERTY REQUIREMENTS FOR TITLE II FORWARD AND

30

REVERSE MORTGAGES .................................................................................................. 14

31 E. TITLE I INSURED PROGRAMS ...................................................................................... 14

32 1. Dealer and Direct Loan Process for Property Improvement Loan Program........................... 14

33

a. Origination Process Options: Direct and Dealer Loans.................................................... 14

34

b. Dealer Approval and Monitoring...................................................................................... 15

35 2. Property Improvement Loan Program .................................................................................... 21

36

a. Origination/Processing...................................................................................................... 21

37

b. Allowable Loan Parameters.............................................................................................. 48

38

c. Property Eligibility............................................................................................................ 50

39

d. Underwriting the Borrower............................................................................................... 56

Handbook 4000.1 ? Title I Sections

i

This is a DRAFT document for posting on the Drafting Table to collect industry feedback. The document will

undergo Departmental Clearance again prior to final publication. See cover page of document for more info.

FHA Single Family Housing Policy Handbook Table of Contents

1

e. Closing and Disbursement .............................................................................................. 115

2

f. Post-Closing and Insurance............................................................................................. 121

3

g. Programs and Products - Refinance................................................................................ 129

4 3. Dealer and Direct Loan Process for Manufactured Home Loan Program............................ 134

5

a. Origination Process Options: Dealer and Direct Lenders............................................... 134

6

b. Dealer Approval and Monitoring.................................................................................... 135

7 4. Manufactured Home Loan Program ..................................................................................... 140

8

a. Origination/Processing.................................................................................................... 140

9

b. Allowable Loan Parameters............................................................................................ 163

10

c. Property Requirements.................................................................................................... 170

11

d. Underwriting the Borrower............................................................................................. 179

12

e. Pre-Closing Reviews by HUD ........................................................................................ 248

13

f. Closing ............................................................................................................................ 250

14

g. Post-Closing and Endorsement ....................................................................................... 258

15

h. Programs and Products ................................................................................................... 266

16 F. APPRAISER AND PROPERTY REQUIREMENTS FOR TITLE I............................ 279

17 1. Appraiser Qualifications ....................................................................................................... 279

18 2. Appraiser Requirements........................................................................................................ 280

19 3. Commencement of the Appraisal.......................................................................................... 280

20 4. Analysis and Reporting Requirements.................................................................................. 280

21 5. Valuation Development ? Chattel......................................................................................... 281

22

a. Standard .......................................................................................................................... 281

23

b. Required Analysis........................................................................................................... 281

24 6. Valuation Development ? Borrower-Owned Land............................................................... 281

25

a. Definition ........................................................................................................................ 281

26

b. Standard .......................................................................................................................... 281

27

c. Required Analysis and Reporting ................................................................................... 282

28 7. Reporting Requirements ....................................................................................................... 283

29

a. Standard .......................................................................................................................... 283

30

b. Certification .................................................................................................................... 283

31 8. Appraisal Exhibits and Photos .............................................................................................. 284

32 9. HUD Certification Label....................................................................................................... 284

33

a. Definition ........................................................................................................................ 284

34

b. Standard .......................................................................................................................... 284

35

c. Required Analysis and Reporting ................................................................................... 285

36 10. Data Plate .............................................................................................................................. 285

37

a. Definition ........................................................................................................................ 285

38

b. Standard .......................................................................................................................... 285

39

c. Required Analysis and Reporting ................................................................................... 285

40 III.SERVICING AND LOSS MITIGATION ...................................................286

41 A. TITLE II INSURED HOUSING PROGRAMS FORWARD MORTGAGES ............. 286

42 B. TITLE II INSURED HOUSING PROGRAMS REVERSE MORTGAGES................ 286

43 C. TITLE I INSURED PROGRAMS .................................................................................... 286

Handbook 4000.1 ? Title I Sections

ii

This is a DRAFT document for posting on the Drafting Table to collect industry feedback. The document will

undergo Departmental Clearance again prior to final publication. See cover page of document for more info.

FHA Single Family Housing Policy Handbook Table of Contents

1 1. Title I Property Improvement Loan Program ....................................................................... 286

2

a. Servicing in Compliance with Law................................................................................. 286

3

b. General Loan Servicer Requirements ............................................................................. 287

4

c. Assumptions.................................................................................................................... 296

5

d. Modification of a Current Loan ...................................................................................... 297

6

e. Loan Default and Loss Mitigation .................................................................................. 297

7

f. Release or Substitution of Security................................................................................. 301

8 2. Title I Manufactured Home Loan Program .......................................................................... 304

9

a. Servicing in Compliance with Law................................................................................. 304

10

b. Loan Servicer Requirements........................................................................................... 305

11

c. Assumptions.................................................................................................................... 314

12

d. Modification of a Current Loan ...................................................................................... 316

13

e. Loan Default and Loss Mitigation .................................................................................. 316

14

f. Servicing of Manufactured Home Lot Loans and Combination Loans .......................... 320

15 IV. CLAIMS AND DISPOSITION.....................................................................322

16 A. TITLE II CLAIMS ............................................................................................................. 322

17 B. TITLE II DISPOSITION ................................................................................................... 322

18 C. TITLE I CLAIMS............................................................................................................... 322

19 1. Title I Claims for Property Improvement ............................................................................. 322

20

a. Claim Filing Deadline..................................................................................................... 322

21

b. Claim Documentation ..................................................................................................... 322

22

c. Calculation of Insurance Claim Payment ....................................................................... 325

23

d. Claim Filing Supplies ..................................................................................................... 326

24

e. Method and Notification of Payment.............................................................................. 327

25

f. Supplemental Claim........................................................................................................ 327

26

g. Terminating Title I Premium Billing .............................................................................. 328

27

h. Abbreviated Claim .......................................................................................................... 328

28

i. Denial of Insurance Claims............................................................................................. 329

29

j. Resubmitted Claims ........................................................................................................ 330

30

k. Appeals ........................................................................................................................... 331

31

l. Rescinding or Repurchasing a Claim.............................................................................. 331

32

m. Lender Responsibilities Pending Insurance Claim Payment .......................................... 332

33 2. Title I Claims for Manufactured Homes............................................................................... 333

34

a. Pre-Claim Requirements................................................................................................. 333

35

b. Maximum Claim Filing Deadline ................................................................................... 333

36

c. Form HUD-637, Title I Claim for Loss .......................................................................... 334

37

d. Claim Documentation ..................................................................................................... 334

38

e. Calculation of Insurance Claim Payment ....................................................................... 336

39

f. Loan Balance as of Default Date .................................................................................... 336

40

g. Interim Interest................................................................................................................ 337

41

h. Repossession and Preservation Cost............................................................................... 337

42

i. Sales Commission........................................................................................................... 337

43

j. Best Price Obtainable...................................................................................................... 338

44

k. Credit due to Borrower ................................................................................................... 338

Handbook 4000.1 ? Title I Sections

iii

This is a DRAFT document for posting on the Drafting Table to collect industry feedback. The document will

undergo Departmental Clearance again prior to final publication. See cover page of document for more info.

FHA Single Family Housing Policy Handbook Table of Contents

1

l. Claims Submission.......................................................................................................... 338

2

m. Updating the Insurance Claim ........................................................................................ 339

3

n. Method and Notification of Payment.............................................................................. 339

4

o. Supplemental Claim........................................................................................................ 340

5

p. Terminating Title I Premium Billing .............................................................................. 340

6

q. Abbreviated Claim .......................................................................................................... 340

7

r. Denial of Insurance Claims............................................................................................. 341

8

s. Resubmitted Claims ........................................................................................................ 343

9

t. Appeals ........................................................................................................................... 343

10

u. Rescinding or Repurchasing a Claim.............................................................................. 344

11 D. TITLE I DISPOSITION..................................................................................................... 344

12 1. Property Disposition for Property Improvement Loans........................................................ 344

13

a. Lender Option to Proceed Against the Security ............................................................. 344

14

b. Foreclosure by Other Lien Holder .................................................................................. 345

15

c. Enforceable Note ............................................................................................................ 345

16 2. Property Disposition of Manufactured Homes ..................................................................... 346

17

a. Proceeding Against the Loan Security............................................................................ 346

18

b. Abandonment.................................................................................................................. 346

19

c. Condition Report............................................................................................................. 346

20

d. Appraisal ......................................................................................................................... 346

21

e. Appraiser Qualifications ................................................................................................. 346

22

f. Damage to Manufactured Home while in Possession of the Lender .............................. 346

23

g. Salvage............................................................................................................................ 347

24

h. Repossession and Preservation Expenses ....................................................................... 347

25

i. Acquisition by Voluntary Conveyance or Surrender...................................................... 347

26

j. Cash for Keys.................................................................................................................. 347

27

k. Sale of the Repossessed Home ....................................................................................... 348

28 V. QUALITY CONTROL, OVERSIGHT AND COMPLIANCE .................351

29 A. QUALITY CONTROL OF LENDERS AND MORTGAGEES .................................... 351

30 1. Quality Control Program Overview...................................................................................... 351

31 2. Institutional Quality Control Program Requirements ........................................................... 351

32 3. Loan Level Quality Control Program Requirements ............................................................ 351

33

a. Loan File Selection ......................................................................................................... 351

34

b. Loan Sample Risk Assessment ....................................................................................... 351

35

c. Origination and Underwriting Case Binder Compliance Review................................... 351

36

d. Quality Control Reviews of Specialized Mortgage Programs........................................ 353

37

e. Servicing Loan File Compliance Review ....................................................................... 353

38 B. QUALITY CONTROL OF OTHER PARTICIPANTS.................................................. 355

39 C. MORTGAGEE MONITORING ....................................................................................... 355

40 1. Cooperation with HUD Investigations and Reviews ............................................................ 355

41 2. Institutional Mortgagee Monitoring...................................................................................... 355

42

a. Title I Lender Monitoring Reviews ................................................................................ 355

43 3. Loan Level Monitoring ......................................................................................................... 355

Handbook 4000.1 ? Title I Sections

iv

This is a DRAFT document for posting on the Drafting Table to collect industry feedback. The document will

undergo Departmental Clearance again prior to final publication. See cover page of document for more info.

FHA Single Family Housing Policy Handbook Table of Contents

1

a. Title I Loan Reviews....................................................................................................... 355

2 D. MONITORING OF OTHER PARTICIPANTS .............................................................. 356

3 E. ENFORCEMENT ............................................................................................................... 356

4 1. Referrals for Non-Compliance.............................................................................................. 356

5 2. Employee Improprieties Attributed to the Mortgagee .......................................................... 356

6 3. Program Office Actions and Sanctions................................................................................. 356

7

a. Actions and Sanctions Against Mortgagees ................................................................... 356

8

Handbook 4000.1 ? Title I Sections

v

This is a DRAFT document for posting on the Drafting Table to collect industry feedback. The document will

undergo Departmental Clearance again prior to final publication. See cover page of document for more info.

I. DOING BUSINESS WITH FHA A. FHA Lenders and Mortgagees 1. Types of Program Approvals

1 I. DOING BUSINESS WITH FHA

2 A. FHA LENDERS AND MORTGAGEES

3 The Doing Business with FHA section in this FHA Single Family Housing Policy Handbook (SF 4 Handbook) covers Federal Housing Administration (FHA) approval and eligibility requirements 5 for both Title I Lenders and Title II Mortgagees, as well as other FHA program participants. For 6 the purposes of this section, Doing Business with FHA, the term "Mortgagee" is used throughout 7 for all types of FHA approval (both Title II Mortgagees and Title I Lenders) and the term 8 "Mortgage" is used for all products (both Title II Mortgages and Title I Loans), unless otherwise 9 specified.

10 A Mortgagee must fully comply with all of the following approval and eligibility requirements in 11 order to be approved by FHA to participate in the origination, underwriting, closing, 12 endorsement, servicing, purchasing, holding, or selling of FHA-insured Title I or Title II 13 Mortgages.

14 The requirements outlined below in subsections 1 through 9 apply to both Single Family (one-to 15 four-units) and Multifamily Mortgagees. If there are any exceptions or program-specific 16 requirements that differ from those set forth below, the exceptions or alternative program 17 requirements are explicitly stated or hyperlinked to the appropriate guidance. Terms and 18 acronyms used in this SF Handbook have their meanings defined in the Glossary and Acronyms 19 or in the specific section of the SF Handbook in which the definitions are located.

20 1. Types of Program Approvals

21 FHA approves Mortgagees separately for participation in the Title I and Title II programs. FHA 22 approval is conveyed to a specific legal Entity and cannot be shared with or extended to other 23 Entities, such as a parent or subsidiary, or any Affiliates of the Mortgagee.

24

a. Title I

25

i. Definitions

26

A Title I Lender is a financial institution that (a) holds a valid Title I Contract of

27

Insurance and is approved by FHA, or (b) held a Title I contract that has been terminated

28

or suspended but remains responsible for servicing or selling the Title I Loans that it

29

holds and is authorized to file insurance claims on these Loans.

30

Contract of Insurance is the term applied to a Title I Lender's authority to originate,

31

underwrite, hold and service Title I Loans.

32

ii. Standard

33

A Title I Lender may be approved to originate, underwrite, close, endorse, service,

34

purchase, hold, or sell Loans under the Property Improvement program and/or the

35

Manufactured Home Loan program. Unless otherwise specified, Title I Lenders must

Handbook 4000.1 ? Title I Sections

1

This is a DRAFT document for posting on the Drafting Table to collect industry feedback. The document will

undergo Departmental Clearance again prior to final publication. See cover page of document for more info.

I. DOING BUSINESS WITH FHA A. FHA Lenders and Mortgagees 2. Types of Approved Mortgagees

1

meet the same approval requirements and follow the same procedures as Title II

2

Mortgagees.

3 2. Types of Approved Mortgagees

4 3. Application and Eligibility Requirements for Approval

5 4. Branch Offices

6 5. Supplemental Mortgagee Authorities

7

a. Title II Direct Endorsement Authority

8

b. Title II Single Family Lender Insurance Authority

9

c. Title I Manufactured Housing Loan Direct Endorsement Authority

10

i. Principal/Authorized Agent

11

(A) Definition

12

A Principal/Authorized Agent Relationship is one in which a Mortgagee with

13

Unconditional Direct Endorsement (DE) authority permits another DE-approved

14

Mortgagee to underwrite Mortgages on its behalf.

15

(B) Standard

16

A principal/authorized agent relationship is not applicable to Title I Loan programs.

17

ii. Sponsor/Sponsored Third-Party Originator Relationship

18

(A) Definition

19

A Sponsor/Sponsored Third-Party Originator (TPO) Relationship is one in which a

20

Title I Lender (acting as the "sponsor") permits another Entity to act as an originator

21

and originate Title I-insured Direct Loans on behalf of the Lender.

22

(B) Standard

23

A Title I Lender may sponsor a TPO only in connection with the Direct Loan process.

24

The TPO may not be a Title I Manufactured Home Dealer or Title I Property

25

Improvement Dealer, who are subject to requirements for supervision and monitoring.

26

A Title I Lender must ensure its sponsored TPO:

27

? meets all state license, registration, or equivalent approval requirements;

Handbook 4000.1 ? Title I Sections

2

This is a DRAFT document for posting on the Drafting Table to collect industry feedback. The document will

undergo Departmental Clearance again prior to final publication. See cover page of document for more info.

I. DOING BUSINESS WITH FHA A. FHA Lenders and Mortgagees 5. Supplemental Mortgagee Authorities

1

? has officers, partners, directors, principals, managers, supervisors, loan

2

processors, and loan originators that are not ineligible under 24 CFR ?

3

202.5(j); and

4

? does not purchase or hold FHA-insured Loans or Mortgages and may not

5

close Loans or Mortgages in their own name.

6

Each sponsor is responsible to HUD for the actions of its sponsored TPOs or Lenders

7

in originating Loans or Mortgages, unless applicable law or regulation requires

8

specific knowledge on the part of the party to be held responsible. FHA does not

9

approve TPOs.

10

Exception for Title I Lenders Acting as a Sponsored Third-Party Originator

11

A Title I Lender may permit its sponsored TPO to close Loans in their own name if

12

the TPO is also a Title I Lender.

13

(C) Required Documentation

14

The Title I Lender reporting the Loan for insurance in FHAC must provide the

15

following information:

16

? Employer Identification Number (EIN)

17

? Name of Sponsored TPO

18

? Loan Officer Name

19

? FHA Lender ID Number for TPO if also FHA Approved

20

iii. Direct Endorsement Authority for Property Improvement Loan

21

FHA's Direct Endorsement delegated authority does not apply to the Title I Property

22

Improvement Loan program.

23

Lenders originate Property Improvement Loans, and underwrite, close and disburse

24

before reporting the Loan for Title I case number assignment and insurance. HUD does

25

not require the Lender to submit loan documents to HUD prior to or at the time of

26

reporting the Loan. Lenders submit loan documents only for claim filing or any Post-

27

Endorsement Technical Review (PETR).

28

(A) FHA Lender Approval

29

A Lender must have FHA approval as a Title I Supervised, Nonsupervised, or

30

Government Lender to be eligible to participate in the Title I program.

31

(B) Underwriter Qualifications

32

The Lender must approve loan underwriters based on a qualifications assessment.

Handbook 4000.1 ? Title I Sections

3

This is a DRAFT document for posting on the Drafting Table to collect industry feedback. The document will

undergo Departmental Clearance again prior to final publication. See cover page of document for more info.

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download