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On Behalf of HUD & FHA Welcome to our session on the Fundamentals of Insurance Endorsement.

On Behalf of HUD & FHA Welcome to our session on the Fundamentals of Insurance Endorsement. . 1. Housekeeping Phone lines ~ Q&A ~ Polling Activities. Phone lines – muted Questions – chat panel Interactivity – voting tools and polling questions. 2. About Your Instructor….

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On Behalf of HUD & FHA Welcome to our session on the Fundamentals of Insurance Endorsement.

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  1. On Behalf of HUD & FHA Welcome to our session on the Fundamentals of Insurance Endorsement. 1

  2. Housekeeping Phone lines ~ Q&A ~ Polling Activities • Phone lines – muted • Questions – chat panel • Interactivity – voting tools and polling questions 2

  3. About Your Instructor… Theresa Ballard 3

  4. FHA Subject Matter Expert Welcome to our guests from the FHA – Debbie Agosto and Phillip Caulfield who will be responding to participant questions and offering additional guidance during today’s webinar. 4

  5. Fundamentals of Insurance Endorsement 5

  6. Upon completion of this training, participants will be able to: • • State the importance of proper insuring. • • List the elements of a case binder. • • Describe the certification and review process, the endorsement process, late request for endorsement, mortgage notes and forms, changes after endorsement, release of portion of security, change of location and Housing approval of title exceptions. • • Describe the Lender Insurance Program, including Lender eligibility and eligible loan products. Course Objectives 6

  7. Elements of the case binder including required documents. • Order/case assembly. • Certification and reviews. • Insurance endorsement and late request for endorsement. • Mortgage notes and forms. • FHA Connection. • Changes made after mortgage insurance. • Release of portion of security and change of location. • Housing approval of title exceptions. • Lender insurance program and eligible loan programs. Course Overview 7

  8. Polling Questions How long have you been working with FHA loans? Have you prepared or submitted packages to FHA for insuring before? 8

  9. Overview of the Insurance Endorsement Process 9

  10. Lender Initiation of Endorsement Process • Source: https://entp.hud.gov/clas/info2.cfm 10

  11. Atlanta HOC serves the states of: Atlanta Homeownership Center • Alabama • Florida • Georgia • Kentucky • Illinois • Indiana • Mississippi • North Carolina • South Carolina • Tennessee • Caribbean - Puerto Rico and the Virgin Islands • Source: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/talk/addr_atl 11

  12. Philadelphia HOC serves the states of: Philadelphia Homeownership Center • Connecticut • Delaware • District of Columbia • Maine • Maryland • Massachusetts • Michigan • New Hampshire • New Jersey • New York • Ohio • Pennsylvania • Rhode Island • Vermont • Virginia • West Virginia • Source: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/talk/addr_phi 12

  13. Denver HOC serves the states of: Denver Homeownership Center • Arkansas • Colorado • Iowa • Kansas • Louisiana • Missouri • Montana • Nebraska • New Mexico • North Dakota • Oklahoma • South Dakota • Texas • Wisconsin • Wyoming • Utah Source: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/talk/addr_den 13

  14. Santa Ana HOC serves the states of: • Alaska • Arizona • California • Hawaii • Idaho • Nevada • Oregon • Washington • Pacific Islands of Samoa, Guam, and Northern Marianas Santa Ana Homeownership Center Source: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/talk/addr_sna 14

  15. Lender Initiation of Endorsement Process • Non-Lender Insurance Program (Non-LI). • Lender Insurance Program (LI). • Use the FHA Connection System (FHAC). • 4155.2.8.B.1a; ML 13-10 15

  16. Polling Question What is the time deadline to initiate the Endorsement Process? 16

  17. The FHA Case Binder 17

  18. Non-LI Lenders must prepare and submit a uniform case binder to the appropriate HOC: • Obtained from private suppliers. • Must meet FHA specifications. • Documents arranged in order. • Complete front information. • Complete case number. Uniform Case Binder Requirements • Sources: 4155.2 8.B.2.b; 1.d; B.3-6 18

  19. Case Binder may contain legible photocopies of: • Original documents, or • Legible printed copies of imaged or electronic documents. Use of Copies in Case Binder • Source: 4155.2 8.B.1.e 19

  20. Originating Lenders must maintain origination case binders in either hard copy or electronic format for two (2) years from the date of endorsement. • Servicing Lenders must maintain case binder in either hard copy or electronic format two (2) years beyond the life of the loan. Case Binder Retention Requirements • Source: 4155.2 8.B.1.f 20

  21. Direct Endorsement (DE) cases are packaged for insurance endorsement after loans are closed. • Lender must: • Assemble the processing and closing documents. • Place the documents in the case binder in the correct order. When to Submit DE Cases • Source: 4155.2 8.B.2.b 21

  22. Questions 22

  23. Insurance Endorsement 23

  24. FHA Connection Highlights • Overview • Accessing • Requesting • Transferring • Cancelling • Third Party Originators/Sponsors http://portal.hud.gov/hudportal/documents/huddoc?id=4155-2_1_secD.pdf 24

  25. All approved lenders may originate, process, close, fund, and submit loans for endorsement in their own names. • A loan may close in the name of the sponsoring lender, the Principal or the Authorized Agent. • Third-party originators may not close in their own names or perform any functions in FHA Connection (FHAC). Endorsement Submission Requirements for All Approved Lenders • Sources: 4155.2 8.B.4.b; 2.B5-6; ML 05-37 25

  26. FHA will notendorse an ineligible mortgage or waive MIP payments on any case: • Purchasing lender may pay any required MIP, late charges, and interest. • FHA-approved originating lender must execute certifications. Requirements for Submission by a Lender Other than Originating Lender • Source: 4155.2 8.B.4.c 26

  27. Lender not yet unconditionally approved for Direct Endorsement (DE) must: • Submit loans to HOC for review and issuance of a Firm Commitment prior to closing. • Submit property and credit documents in an FHA case binder in the order specified in HUD 4155.2 8.B.2 (excluding the closing documents). • After FHA staff issues a Firm Commitment, the loan may be closed. Requirements for a Lender With Conditional DE Approval • Source: 4155.2 8.B.5.a; 8.B.2 27

  28. After the loan is closed, lender must ensure: • Required certifications are executed. • Closing documents and Firm Commitment Conditions are assembled properly. • The package is submitted to the appropriate HOC for endorsement processing. Conditional DE Approved Lender - Submitting a Test Case Closing Package • NOTE: HOC will provide additional guidance on proper submission of Test Case Closing Packages. • Source: 4155.2 8.B.5.a-b 28

  29. Program enables high-performing lenders to insure FHA forward mortgage loans without a pre-endorsement review by HUD. • Loan Products eligible for LI Program are Traditional DE non-HECM mortgage loans. Lender Insurance Program (LI Program) • HUD 4155.2 8.C.3; C.1.b; ML 13-10 29

  30. To participate: • Be an unconditionally approved DE Lender for at least two (2) years. • An acceptable default and claim rate. • DE Lenders that underwrite as sponsors for TPOs: • Default and claim rate is the aggregate of both retail and sponsored TPOs. • Lenders must agree to indemnify FHA under the conditions National Housing Act (NHA). LI Program Eligibility • https://entp.hud.gov/pdf/mp_sfo04_insapp.pdf; ML 13-10 30

  31. Approved LI Lender: • Is required to perform a pre-endorsement review of each case before processing the endorsement. • Processes the endorsement for all of its forward cases. • Required to send case binders to HUD only when requested. Approved LI Requirements • Source: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/lender/lendins 31

  32. DE Case Binder Document Requirements Source: 4155.2 8.B.2.b 32

  33. DE Case Binder Document Requirements Source: 4155.2 8.B.2.b 33

  34. DE Case Binder Document Requirements Source: 4155.2 8.B.2.b 34

  35. DE Case Binder Document Requirements Source: 4155.2 8.B.2.b 35

  36. DE Case Binder Document Requirements Source: 4155.2 8.B.2.b 36

  37. DE Case Binder Document Requirements Sources: 4155.2 8.B.2.b; ML 2009-53 37

  38. DE Case Binder Document Requirements Source: 4155.2 8.B.2.b 38

  39. Polling Question As an “Originating Lender,” do you need to keep and submit all copies of subsequent GFE’s for endorsement? 39

  40. HECM Case Binder Document Requirements http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/10-22mla.pdf 40

  41. HECM DE Case Binder Document Requirements Source: 4155.2 8.B.3.a 41

  42. HECM DE Case Binder Document Requirements Sources: 4155.2 8.B.3.a; ML 2010-22 42

  43. HECM DE Case Binder Document Requirements Sources: 4155.2 8.B.3.a; ML 2010-22 43

  44. HECM DE Case Binder Document Requirements Source: 4155.2 8.B.3.a 44

  45. Polling Question As an “Originating Lender,” how long must you maintain a copy of the HUD Case Binder? 45

  46. Lender initiation of the Endorsement Process: • Non-Lender Insurance Program (Non-LI). • Lender Insurance Program (LI). HOC Loan Processing Tasks (DE non-LI) • Sources: 4155.2 8.C.1.a-d; 8.A.1 46

  47. HOC Loan Processing Tasks (DE non-LI) • Sources: 4155.2 8.C.1.a; 8.A.1 47

  48. Case Binder Accepted Pre-Endorsement Review • Upon receipt of the case binder, HOC conducts a pre-endorsement review to determine if: • Request for endorsement and case binder are complete, and • All necessary documents are present and signed. • Source: 4155.2 8.C.1.b 48

  49. Case Binder Accepted Pre-Endorsement Review • Source: 4155.2 8.C.1.b 49

  50. FHA monitors lender compliance through pre- and post-endorsement reviews performed by: • Non-LI Lenders: • FHA staff or contractors review files. • LI Lenders: • Lender staff. • PETRs performed after loan closing and endorsement: • FHA staff or contractors. Types of Loan Endorsement Reviews • Sources: 4155.2 8.C.1.c-e; 8.C.4; 2.A; 9.B.1 50

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