SF Handbook Overview Frequently-asked Questions Last Updated: June 24, 2015

Transcription

1 FHA Single Family Housing Policy Handbook (SF Handbook; HUD Handbook ) SF Handbook Overview Frequently-asked Questions Last Updated: June 24, 2015 SF Handbook General Q1: Where is the official version of the SF Handbook published? A1: As of May 18, 2015, the official version of the SF Handbook (HUD Handbook ) is published in an online, electronic format on the AllRegs electronic policy platform. Access to the online SF Handbook is available for free from the link on HUD s Client Information Policy Systems (HUDCLIPS) web page at: FHA also maintains a portable document format (PDF) version of the SF Handbook on its HUDCLIPS web page, and will continue to do so until September 11, Q2: What is the effective date for the SF Handbook s published sections? A2: The effective date for implementation of the new and/or revised policies and processes contained within published SF Handbook are as noted below. The following sections are effective on September 14, 2015: Doing Business with FHA - Lenders and Mortgagees Doing Business with FHA - Other Participants - Appraiser Quality Control, Oversight and Compliance - Lenders and Mortgagees (Except for Section V.A.3.c.i Origination and Underwriting Loan File Compliance Review Minimum Requirements which is effective for case numbers assigned on or after September 14, 2015) The Origination through Post-Closing/Endorsement for Title II Forward Mortgages section of the SF Handbook is effective for case numbers assigned on or after September 14, The policies in the Servicing and Loss Mitigation (Servicing) section, and the Servicer Tier Ranking System II (TRS II) become effective on March 14, 2016, except the Default Servicing policies in Section III.A.2, which become effective for all FHA-insured mortgages in default on or after March 14, Q3: Why did FHA extend the effective date for certain sections from its original June 15, 2015 date? A3: FHA recognizes that there currently are a number of competing initiatives occurring simultaneously in the mortgage industry that may be challenging mortgagee and other stakeholder resources. For this reason, FHA extended the effective date by 90 days for sections of the SF Handbook that were originally announced to become effective on June 15, The expectation is that this additional time will enable mortgagees and others to be fully compliant with the new effective date. Q4: Which Mortgagee Letters no longer apply as of the effective dates? A4: Please see the March 18, 2015 and the June 24, 2015 Transmittal, included in the SF Handbook posted on HUDCLIPS and the online SF Handbook, for a detailed list of the existing Single Family Handbooks, Mortgagee Letters, and other policy documents that will be superseded in whole or in part on the effective 1

2 dates of the SF Handbook. Please note that all applicable law and existing Single Family Handbooks, Mortgagee Letters, and policy documents continue to apply until the effective date. Q5: If mortgagees are ready to implement policies now, will they be allowed to use the SF Handbook policies? A5: No. Mortgagees must use existing FHA policy until the new SF Handbook becomes effective. The new SF Handbook is available online to help mortgagees prepare, but existing guidance remains in place until the effective date: September 14, 2015 for Doing Business, Origination through Endorsement and Quality Control, Oversight and Compliance sections; and March 14, 2016 for the Servicing and TRS II sections, except the Default Servicing policies in Section III.A.2. The Default Servicing policies in Section III.A.2 become effective for all FHA-insured mortgages in default on or after March 14, Q6: How will FHA update the online SF Handbook? A6: FHA will regularly update online SF Handbook policies by section or sub-section as needed, and usually following an announcement via FHA s standard communications vehicles, such as a Mortgagee Letter. Updates and additions incorporated into the online SF Handbook will be clearly marked using a system of color-coded notations. Q7: Will FHA maintain the portable document format (PDF) version of the SF Handbook? A7: FHA will maintain the PDF version of the SF Handbook on its HUDCLIPS web page until at least September 11, Q8: Are all updates and additions now incorporated into the online SF Handbook? A8: The current online SF Handbook contains all updates and additions that were originally published in PDF format on March 18, 2015, without changes, and the Servicing and TRS II sections published on June 24, In addition, on March 23, 2015, FHA issued Mortgagee Letter , which announced FHA s Electronic Appraisal Delivery (EAD) portal, and subsequently posted future SF Handbook change pages. These have not yet been incorporated into the online SF Handbook. The EAD SF Handbook change pages are still available on FHA s SF Handbook Information Page at Doing Business and Oversight and Compliance Q9: What is the effective date for the SF Handbook Doing Business with FHA and Quality Control, Oversight and Compliance sections? A9: The SF Handbook Doing Business with FHA Lenders and Mortgagees (Doing Business) and Quality Control, Oversight, and Compliance (Oversight and Compliance) sections will become effective on September 14, 2015 with one exception. As noted in the April 30, 2015 SF Handbook Transmittal, Section V.A.3.c.i-Origination and Underwriting Loan File Compliance Review-Minimum Requirements in the Quality Control section-is effective for case numbers assigned on or after September 14, All applicable law and existing Single Family Handbooks, Mortgagee Letters, and policy documents continue to apply until the Doing Business and Oversight and Compliance sections become effective on September 14,

3 Q10: Are there policy changes in the SF Handbook Doing Business and Oversight and Compliance sections? A10: Yes. The Doing Business and Oversight and Compliance sections of the SF Handbook, which published on March 18, 2015, contain both changes to FHA policies, and revisions to existing policy language. Q11: Did FHA incorporate feedback received into the SF Handbook Doing Business and Oversight and Compliance sections? A11: FHA reviewed all feedback submitted during its feedback response period for the draft version of the Doing Business and Oversight and Compliance sections. FHA received over 550 responses to its request for feedback, and after assessing this feedback, developed the Doing Business and Oversight and Compliance sections that published on March 18, Q12: Can I still submit feedback on the draft versions of the Doing Business and Oversight and Compliance sections? A12: No. FHA has published the Doing Business and Oversight and Compliance sections. Policies contained in these sections (HUD Handbook , dated March 18, 2015), are effective as of September 14, 2015, unless otherwise noted in the SF Handbook April 30, 2015 Transmittal. Q13: Why does the Other Participants subsection in the published version of Doing Business and Oversight and Compliance contain only information on Appraisers? A13: The special requirements for Other Participants such as appraisers, real estate brokers, 203(k) Consultants, Direct Endorsement (DE) underwriters, and Nonprofits were developed separately, and with the exception of the Appraiser subsection, which was included in an earlier posting, were posted in draft form for feedback in January 2015; the feedback period for which closed on February 22, FHA is in the process of assessing the feedback received and will finalize these subsections for publication later in When finalized, these requirements will be published and integrated into the larger Doing Business and Oversight and Compliance sections. All applicable law and existing Single Family Handbooks, Mortgagee Letters, and policy documents continue to apply until these subsections become effective at a later date. Q14: Why are certain Title I-related sections in the Doing Business and Oversight and Compliance sections listed as Reserved for Future Use? A14: The special requirements for Title I Manufactured Housing Loan Direct Endorsement Authority, Title I Quality Control, Title I Lender Monitoring Reviews, and Title I Loan Level Reviews are under development along with the Title I programs policy document, and will be posted for feedback at a later date. All applicable law and existing Single Family Handbooks, Mortgagee Letters, and policy documents continue to apply until these subsections are published in final form and become effective at a later date. Q15: Will FHA publish a Highlights of Changes document that summarizes the policy changes contained in the Doing Business and Oversight and Compliance sections? A15: No. Specific policy changes must be read and understood within the full context of the published sections. 3

4 Origination through Endorsement General Q16: What is the effective date for the SF Handbook Origination through Post-Closing/Endorsement for Title II Forward Mortgages section? A16: The SF Handbook Origination through Post-Closing/Endorsement for Title II Forward Mortgages (Origination through Endorsement) section becomes effective for FHA case numbers assigned on or after September 14, All applicable existing Single Family Handbooks, Mortgagee Letters and policy documents continue to apply until Origination through Endorsement becomes effective for FHA case numbers assigned on or after September 14, Q17: Are there policy changes in the SF Handbook Origination through Endorsement section? A17: Yes. The Origination through Endorsement section of the SF Handbook which published on September 30, 2014, contained both changes to FHA policies, and revisions to existing policy language. The updates and additions to this section published on March 18, 2015 also contained policy changes and revisions that were implemented by Mortgagee Letters between September 30, 2014 and March 18, Q18: Did FHA incorporate feedback received into the SF Handbook Origination through Endorsement section? A18: FHA reviewed all feedback submitted during its feedback response period for the draft version of this section, originally titled Application through Endorsement for Title II Forward Mortgages. FHA received over 3,400 feedback responses from mortgagees, organizations, individuals, and the general public. FHA considered the feedback received when developing the Origination through Endorsement section published on September 30, 2014 and for the new parts of this section published on March 18, Q19: Can I still submit feedback on the policies contained in the draft Origination through Endorsement section posted on the FHA s Drafting Table web page? A19: No. The official feedback period is closed. Q20: Why are there no Condominium Project Approval requirements in Origination through Endorsement? A20: FHA s Condominium Project Approval requirements will go through a formal rule making process before they are published in the Origination through Endorsement section. Our existing Condominium Project Approval requirements located in Mortgagee Letter , and the Condominium Project Approval and Processing Guide attached to Mortgagee Letter continue to apply. Q21: How do I know what s changed in Origination through Endorsement with the March 18 updates? A21: Policy changes and revisions made to Origination through Endorsement and published on March 18, 2015 are noted in the SF Handbook Transmittal that is included in the online SF Handbook (HUD Handbook ). All additions and updates published on March 18, 2015 are incorporated into the online SF Handbook that launched on May 18, Q22: Were there changes to the Streamline Refinance product as a result of the Notice published in the Federal Register in October 2014? A22: A final effective date for FHA s Streamline Refinance requirements, which, after review of the comments received in response to the Federal Register notice soliciting comments on this section, remain unchanged from those published in the Origination through Endorsement section on September 30,

5 Q23: Why do you say that the Origination through Endorsement section is essentially complete? A23: The Condominium Project Approval section of Origination through Endorsement must go through formal rule-making before it can be completed and published. The HUD REO Purchasing section is still in development. Despite these yet-to-be published components, mortgagees and other stakeholders now have a consolidated source of policy available for origination through obtaining an FHA insurance endorsement for essentially all FHA Title II forward mortgage products and programs. Q24: Why are there links in Origination through Endorsement that do not work? A24: There are links in the Origination through Endorsement section of the online SF Handbook that are inactive at this time. These links are placeholders and will become live when the connecting sections of the SF Handbook are published. Q25: Which Mortgagee Letters no longer apply on the Origination through Endorsement effective date? A25: On March 18, 2015, FHA published a list of Single Family Mortgagee Letters and Handbooks that will be superseded in whole or in part by the Origination through Endorsement section when the section becomes effective. On April 30, 2015, FHA extended the effective date for the SF Handbook to September 14, 2015, and thus, all policy documents on this list will now be superseded as of the new, September 14, 2015 effective date. Please note that all applicable law and Single Family Handbooks, Mortgagee Letters and policy documents continue to apply until Origination through Endorsement becomes effective for FHA case numbers assigned on and after September 14, Q26: After the September 14, 2015 effective date for Origination through Endorsement, will I still have access to superseded Mortgagee Letters and Handbooks? A26: Yes. FHA is working on its system for marking and making available its superseded Mortgagee Letters and other policy documents to launch on or shortly after the Origination through Endorsement September 14, 2015 effective date. FHA understands that these documents must remain available to mortgagees and other stakeholders for a variety of purposes. All Mortgagee Letters and other policy documents to be superseded by the SF Handbook on its effective date are still posted on HUDCLIPS today. Q27: When will the FHA Resource Center s Knowledge Base be updated to reflect the policies contained in the Origination through Endorsement section? A27: FHA intends to have its Resource Center online Knowledge Base updated to reflect Origination through Endorsement policy information on September 14, FHA has published a preview of detailed Frequently Asked Questions that will be uploaded to the online Knowledge Base on September 14, These detailed FAQs can be previewed on FHA s SF Handbook Information Page at Q28: Will FHA continue to issue policy revisions for Origination through Endorsement before the September 14, 2015 effective date? A28: FHA may issue additional policy changes that will revise content in the Origination through Endorsement section. In addition, policy and wording changes that FHA intends to make in the future, and that have not yet been incorporated into the online SF Handbook, are published on FHA s SF Handbook Information page on HUD.gov at 5

6 Q29: Will FHA publish a Highlights of Changes document that summarizes the policy changes contained in Origination through Endorsement? A29: No. The Origination through Endorsement section is a significant change in how FHA presents policies and requirements. Specific policy changes must be read and understood within the full context of the section. FHA has posted a series of pre-recorded training sessions for stakeholders. These selfpaced pre-recorded sessions are available 24/7 on HUD.gov, and provide detailed and comprehensive reviews of the policies contained in each section of Origination through Endorsement. Stakeholders can access the pre-recorded modules at Section 203(k) Rehabilitation Mortgage Insurance Program Q30: What changed from the posted to the published version of the 203(K) product section? A30: There are few changes to the published version of FHA s 203(k) Rehabilitation Mortgage section from the draft version posted for feedback in August 2014 to the completed version published on March 18, Most, but not all, changes are to language to conform to the format and style of the SF Handbook, and to ensure a clear and consistent presentation of policy. Q31: FHA proposed several policy changes in the draft 203(k) product section. Have these proposals been incorporated into the published version? A31: Yes. With one notable exception, FHA incorporated all of its proposed 203(k) product changes from the draft section into the section that published on March 18, 2015 and that is now in the online SF Handbook. The exception is the requirement to obtain both an as-is and after improved appraisal on 203(k) mortgages, which FHA proposed in the draft version of this section, but did not adopt in the published section. Q32: What are the specific policy changes included in the published 203(k) product section? A32: FHA is not publishing a detailed document of specific changes to the 203(k) product section, as it is important that mortgagees and 203(k) consultants read the section in its entirety to understand the policy within the context of the entire section and the larger Origination through Endorsement section. However, mortgagees should note several key changes in the section in particular: The Streamlined 203(k) Program name has been changed to its new name, Limited 203(k) Program. The establishment of a loan-to-value (LTV) ratio calculation of Mortgage Insurance Premiums (MIP) that is separate and distinct from the LTV ratio calculation for the maximum mortgage amount Revised appraisal requirements for properties that have sold in the previous 12 months. Elimination of the Form HUD 92700, Maximum Mortgage Worksheet, that was highlighted in the draft section posted for feedback. Technology is currently in development to automate the maximum mortgage calculation and make it available online as well as in FHA Connection. FHA will announce when this functionality is available. In addition, mortgagees should note that until FHA makes the maximum mortgage calculation functionality available in FHAC, mortgagees must detail the data delivery requirements in SF Handbook 8.a.xvi on the form HUD LT, or include the applicable 203(k) Maximum Mortgage Calculation Worksheet published on FHA s SF Handbook List of Linked References page on March 18,

7 FHA will announce the availability of the FHAC 203(k) data delivery functionality when it becomes available, with a future effective date that will provide significant lead time for mortgagees to adopt its use before the mandatory effective date. Mortgagees, FHA-approved 203(k) Consultants and other stakeholders are encouraged to view FHA s self-paced, recorded Origination through Endorsement training modules. These training modules provide greater detail on FHA s 203(k) program and Consultant policies. These modules are available at Q33: What is the effective date for the 203(k) policies contained in the 203(k) product section published on March 18, 2015? A33: The published 203(k) policies are effective for FHA case numbers assigned on and after September 14, This is the same effective date, extended from its original June 15, 2015 date, as the rest of the policies contained in the larger online SF Handbook Origination through Endorsement section. Q34: Must mortgagees continue to use Form HUD 92700, Maximum Mortgage Worksheet, until FHA Connection is updated with the automated calculation? A34: Effective for FHA case numbers assigned on or after September 14, 2015, the 203(k) section of the SF Handbook s Origination through Endorsement section contains the policy requirements for the calculation of the maximum mortgage amount. Mortgagees will not be required to complete Form HUD 92700, but: Must calculate the maximum mortgage amount in accordance with the requirements in the SF Handbook. Detail the data delivery requirements in SF Handbook 8.a.xvi on the form HUD LT, or include the applicable 203(k) Maximum Mortgage Calculation Worksheet accessible from FHA s SF Handbook List of Linked References page on March 18, until automated functionality is available in FHA Connection. Q35: Are there policy changes for 203(k) Consultants? A35: FHA revised the 203(k) Consultant section of Origination through Endorsement to conform language to the style of the larger SF Handbook, and for consistency and clarity of intent. These changes are not intended to be a departure from 203(k) Consultant requirements in place today. FHA-approved 203(k) Consultants are encouraged to view FHA s self-paced, recorded Origination through Endorsement training modules. These training modules provide greater detail on FHA s 203(k) program and Consultant policies. These modules are available at Q36: Do the 203(k) Consultant policies impact a consultant s ability to maintain 203(k) Consultant Roster eligibility? A36: The 203(k) Consultant policies published on March 18, 2015 are for consultant actions required for the origination and processing of a 203(k) Rehabilitation Mortgage. This section does not cover 203(k) Roster eligibility requirements. 203(k) Consultant Roster eligibility requirements are still in draft form and will be published in the future in the Other Participants section of the SF Handbook s Doing Business with FHA section. All applicable law and existing Single Family Handbooks, Mortgagee Letters, and policy documents continue to apply. Q37: Has the 203(k) Handbook also been updated? A37: No. FHA s Single Family Handbook , 203(k) Rehabilitation Home Mortgage Insurance, will be completely superseded by the SF Handbook 203(k) product and consultant requirements, when these requirements become effective for FHA case numbers assigned on and after September 14,

8 Q38: Has FHA changed its 203(k) Consultant fees with the publication of the 203(k) Consultant section? A38: The 203(k) Consultant fees in the published version of the 203(k) Consultant section remain unchanged from those currently in place. However, FHA intends to solicit public comment on its existing 203(k) Consultant fees in the near future. Appraiser & Property Requirements/Data Delivery Guide Q39: FHA proposed several policy changes in the draft Appraiser and Property Requirements section. Have these proposals been incorporated into the published version? A39: Yes. The published version of the Appraiser and Property Requirements for Title II Forward and Reverse Mortgages (Appraiser and Property Requirements) section includes the revisions and clarifications put forth in the draft section. This includes, but is not limited to, the following key policy revisions and clarifications: Properties with a Legal Non-Conforming Use: requiring the appraiser to comment if improvements can be rebuilt by right. Accessory Dwelling Units: emphasizing Highest and Best Use to determine property type of classification. Attic and Crawl Space Inspection Requirements: clarifying that FHA requires an inspection. General Acceptance Criteria, Property Eligibility, Non-residential Use of Property: ensuring that mixed use properties comply with zoning. Cost and Income Approach for Value: clarifying that ALL appropriate approaches must be utilized when applicable. Sales History of Comparables: Requiring three years or more, instead of one year, and requiring due diligence by the appraiser for analyzing prior sales of comparable properties. Energy Efficient Building Components, Solar Systems, etc.: requiring that contributory value of building components that enhance efficiency or energy savings must be analyzed and reported. FHA requires that the appraiser utilize all appropriate methods of valuation and does not restrict this to only a matched pairs analysis. Q40: What are the specific policy changes included in the published version of the Appraiser and Property Requirements section? A40: FHA is not publishing a detailed document of specific changes to the Appraiser and Property Requirements section, as it is important that appraisers and mortgagees read the section in its entirety to understand the policy within the context of the entire section and the larger Origination through Endorsement section. Mortgagees, FHA Roster Appraisers and other stakeholders are encouraged to view FHA s self-paced, recorded Origination through Endorsement training modules. These training modules provide greater detail on FHA s Appraiser and Property Requirements policies. These modules are available at 8

9 Q41: Will the Single Family Housing Appraisal Report and Data Delivery Guide need to be updated again when FHA launches its Electronic Appraisal Delivery (EAD) portal? A41: At this time, FHA does not anticipate immediate updates to the Single Family Housing Appraisal Report and Data Delivery Guide to accommodate a future launch of its EAD portal. The guide was written for, and makes reference to, the future EAD portal, to accommodate an initial release of the EAD in the future. Q42: Do I have to submit appraisal data differently now that FHA has published its Single Family Housing Appraisal Report and Data Delivery Guide? A42: Mortgagees and appraisers should review the guide to ensure that their appraisal reporting and data delivery processes conform to the requirements in the guide before the effective date. In large part, the requirements in the guide conform to current industry use of the Uniform Appraisal Dataset, with additional FHA-specific requirements. Servicing and Loss Mitigation/TRS II Q43: What is included in the SF Handbook Servicing section? A43: The Servicing and Loss Mitigation (Servicing) section includes information in the following categories: General servicing requirements for FHA-insured mortgages; Servicing of performing mortgages; Default servicing, including HUD s Loss Mitigation Program and conveyance standards; and Special mortgage program servicing for active and inactive programs, including: o Hawaiian Homeland Mortgages, o Mortgages and Mortgage Protection for Service Members, o Section 235 Mortgages and Recapture, o Hope for Homeowners, o Good Neighbor Next Door Program, and o The Nehemiah Program. The Servicing section brings all servicing information from the 1994 Administration of Insured Home Mortgages (4330.1) Handbook, subsequent Mortgagee Letters, Housing Notices, and other servicing policies and regulations into this one comprehensive compilation of servicing policy. Additional SF Handbook sections on claims calculation and filing and on disposition will be posted for stakeholder feedback in the future. Q44. Does the SF Handbook Servicing section include policy changes? A44. Beyond a new format and structure, some revisions to existing policy language were made in the SF Handbook Servicing section. It is important that servicers and mortgagees read the section in its entirety to understand the policy within the context of the entire section. FHA will host an industry briefing on the Servicing and TRS II sections of the SF Handbook shortly after the publication of these sections. This briefing will include an overview of the sections, and will highlight specific changes to FHA servicing policy and guidance. 9

10 Q45. What will the effective date be for the Servicing and TRS II sections? A45. The following sections are effective on March 14, 2016: Servicing of FHA-Insured Mortgages, of Servicing and Loss Mitigation, Title II Insured Housing Programs Forward Mortgages; Programs and Products, of Servicing and Loss Mitigation, Title II Insured Housing Programs Forward Mortgages; and Servicer Tier Ranking System II, of Quality Control, Oversight and Compliance, Mortgagee Monitoring. The section Default Servicing, of Servicing and Loss Mitigation, Title II Insured Housing Programs Forward Mortgages, is effective for all FHA-insured mortgages in default on or after March 14, All applicable law and existing Single Family Handbooks, Mortgagee Letters, and policy documents continue to apply until these sections become effective. Q46. What happens to existing Handbooks and/or Mortgagee Letters with the publication of the Servicing and TRS II sections? A46. As described in the June 24, 2015 SF Handbook Transmittal, the Servicing and TRS II sections published on June 24, 2015, will supersede relevant sections of the 1994 Administration of Insured Home Mortgages (4330.1) Handbook, existing Mortgagee Letters, and existing policy documents when the policies it contains become effective. All existing policy documents will remain available for historical reference and quality assurance/compliance purposes. Q47: Did FHA incorporate feedback received into the SF Handbook Servicing section? A47: FHA reviewed all feedback submitted during its feedback response period for the draft version of the Servicing section. FHA received over 1,030 responses to FHA s request for feedback, and after assessing this feedback, developed the Servicing section that published on June 24, Q48: Can I still submit feedback on the draft versions of the Servicing and TRS II sections? A48: No. The official feedback period has closed. Q49: Which Mortgagee Letters no longer apply on the Servicing and Loss Mitigation for Title II Forward Mortgages and TRS II effective date? A49: Please see the June 24, 2015 SF Handbook Transmittal for a detailed list of the existing Single Family Handbooks, Mortgagee Letters, and other policy documents that will be superseded in whole or in part by the Servicing section. Please note that all applicable laws and Single Family Handbooks, Mortgagee Letters, and policy documents continue to apply until these sections become effective. Access the June 24, 2015 SF Handbook transmittal on FHA s online SF Handbook site or via the PDF version at Q50: Will FHA continue to issue policy revisions for Servicing before the March 14, 2016 effective date? A50: FHA may issue additional policy changes that will revise content in the Servicing section during the period between its publication on June 24, 2015 and its effective date. 10