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Mortgage Application Credit Explanation Letter - PowerPoint

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					Wholesale Lending
 FHA Procedure
           One-Time Set-Up
1.       Verify your company is approved for FHA
         and is sponsored by Flagstar Bank.
     •     Your corporate office will have this information and
           your HUD-approved ID number.

     •     Your HUD ID number consists of 10 digits and is also
           your origination ID number.

     •     Your Sponsor ID number is Flagstar Bank’s HUD-
           approved ID number and is 7127400001.

2.       If you are approved by HUD and not
         currently sponsored by Flagstar Bank,
         contact your local account executive for the
         FHA applications for sponsorship.
               Borrower
     Interaction/Forms/Signatures
1.   If you are approved, take a complete and accurate
     loan application from your borrower.

2.   Verify your loan amount is within the FHA loan limit.*

3.   Complete a Good Faith Estimate and Truth in
     Lending. Both disclosures must be dated within
     three days of your initial loan application and
     provided to underwriting at time of submission.


•    *   FHA loan limits are based on property location. To verify your loan amount does not exceed the FHA
     Maximum Mortgage Limit refer to: https://entp.hud.gov/idapp/html/hicostlook.cfm
                Borrower
      Interaction/Forms/Signatures
4.   Obtain copy of borrower’s pay stub and calculate income
     on monthly basis. Must determine if borrower is hourly,
     salary, self-employed, commissioned etc, and calculate
     income based on FHA income/employment guidelines in
     the 4155.1Rev 5 Credit Manual located on our Web site.*

5.   A complete list of the FHA forms and disclosures needed
     for each type of loan transaction is located on our
     website.**

•    *     Locate the FHA Credit Manual (4155.1 Rev. 5) on our Web site. Log in to our Web site and click on
     Tools and then click on Industry Links. This manual is located under Ginnie Mae links.
•    **    FHA Forms and Disclosures. Log in to our Web site and click on Seller’s Guide, then 9000 Gov
     Guidelines. Click on Doc. #9005 and then choose the transaction type at the top of this document for a list
     of required FHA forms and disclosures and completion instructions.
                                Submission
1.   Enter application data into your LOS system and export the
     file to Flagstar Bank Loantrac Web site.*

2.   Register as an FHA loan and complete the Government
     Lending section in our Loantrac system.

3.   Send loan data through AUS/Credit Submission. Choose
     either DU or LP. Reminder: DU and LP do not make the
     loan decision. The loan data entered is automatically sent
     to the FHA Total Scorecard System for a loan decision.

4.   Obtain findings and credit report through the FHA Total
     Scorecard System and verify data entered into system is
     accurate to the findings data (i.e., income, assets, loan
     amount, rate, PITI and reserves).
•    *    Live training is available for Government Loan data entry and exporting instructions. Please refer to
     our Web site under Help & Training and choose Live WebEx Training. You can review the current day,
     upcoming, daily and weekly sessions available.
                                  Submission
5.   Determine if Total Scorecard response is Approve, Accept or
     Refer.

6.   If response is Refer, review Doc. #9340 on our Web site for the
     documentation required for underwriting submission. A Refer
     response for credit issues requires explanation letters and/or
     additional documentation to justify approval. A Refer response for
     a ratio issue requires compensating factors to justify approval.*

7.   If your loan received an Approve or Accept response and the data
     integrity is accurate, no explanation letter is required for any late
     payments on trade lines; no collections need to be paid and
     excessive ratios do not require any compensating factors for
     approval. Other documentation waivers may apply.


8.   *     Doc. #9340. FHA Refer Response Helpful Hints Checklist. Log in to our Web site and click on Seller’s Guide,
     then 9000 Gov Guidelines. Click on Doc. #9340 located under FHA Forms/Disclosures/Product Descriptions.
                     Submission
8.    If the data integrity is accurate and the file does not obtain
      an Approve, Accept or Refer response, the loan will
      automatically be manually underwritten.

9.    Order CAIVR (Credit Alert Interactive Voice Response)
      number for all borrowers through the FHA Connection
      System. Enter the CAIVR in your LOS system in order for
      this information to be included on your Mortgage Credit
      Analysis Worksheet.*

10.   A defaulted or claim on the CAIVR number requires an
      exception for approval by underwriting.

11.   If loan is a refinance or a purchase with property address,
      order Case Number Assignment through the FHA
      Connection System. Not applicable if loan submission is
      for a TBD property.*
                         Submission
12.   A CAIVR number and Case Number Assignment are not mandatory to
      obtain a valid response through the FHA Total Scorecard System. If the
      CAIVR number and Case Number are not provided at time of loan
      submission, both will be a condition of loan approval.

13.   Choose the Government Underwriting New Submission cover sheet from
      our Loantrac system and provide as many documents as possible from the
      list provided on the cover sheet.

14.   Note. If the FHA Total Scorecard does not return an Approve, Accept or
      Refer response, you will not be able to choose the Government
      Underwriting New Submission cover sheet in our Loantrac system. You
      must obtain the cover sheet in our Seller’s Guide, Doc. #3218, from our
      Web site. Complete the cover sheet and upload or fax it with the other
      submission documents.

15.   Include a separate cover letter to Underwriting if there are any unusual
      circumstances that will assist the underwriter during the underwriting
      process.

16.   Your submission can include limited documentation or as much as you
      prefer. The more documents that are provided up front, the fewer conditions
      you should have on your approval letter.
                                           Submission
17.   Upload or fax your loan documents to Flagstar.

18.   Underwriting turn time varies from day to day. You can check the
      government turn time hours on our Web site for purchases, refinances and
      conditions on a daily basis.

19.   After the underwriter has made the loan decision, you can view the approval
      letter or denial letter in the Loan Information link on our wholesale Web site
      at wholesale.flagstar.com

20.   An underwriter will call you with the loan decision. You can discuss any
      conditions on the approval or discuss the reasons for loan denial at this
      time.

21.   Once the loan is approved, begin to gather all conditions on the loan
      approval.

22.   You should order the appraisal at this time unless the loan was submitted as
      a TBD property.*

23.   All required standard forms and/or FHA forms that were not included with
      your submission will be a condition on the approval letter.
*     When ordering the appraisal, you must make sure the appraiser is both FHA-eligible and eligible by Flagstar Bank. This information can be found at
      www.wholesale.flagstar.com. Click on Eligible Appraiser in the Search link. Locate the FHA appraiser under Eligible HUD FHA Appraisers first, and then
      determine if the appraiser is Flagstar-eligible using the Search Criteria section.
                       Submission
24.   Any income documentation, asset documentation etc., listed in
      your FHA Total Scorecard findings report that was not included
      with your submission will be a condition on the approval letter.

25.   Review your approval letter and compare your conditions to the
      findings from the FHA Total Scorecard findings report. If you have
      questions regarding any conditions, you can contact the
      underwriter or contact the Government Underwriting Support Desk
      at (800) 447-7181, option 2, for additional assistance.

26.   After all conditions are obtained, upload or fax the conditions to
      Underwriting. Choose the Underwriting Conditions Cover sheet
      from our Loantrac system.

27.   When the conditions have been reviewed by underwriting, the
      status of your loan will be updated and you can review the
      updated approval letter in the Loan Info Link on our Web site.

28.   It is important to send all conditions at one time in order to obtain
      a Clear to Close on your loan.
                                        Closing
1.   Once the loan is Clear to Close, read all closing instructions carefully and
     contact Underwriting if you have any questions prior to having the closing
     package prepared.

2.   If you are a broker, you must order your closing package through
     Government Wholesale Lending. Closing package order requests can be
     found on our Web site, Doc. #9321. It is important that this form be
     completed in its entirety and accurately to avoid any closing delays. If you
     are a correspondent, you can prepare your own closing package.*

3.   Set closing date and close loan according to the approval letter closing
     instructions.

4.   If you are a broker, the closing agent at the title company must deliver the
     closing package to Flagstar Bank after closing. If you are a correspondent,
     you are responsible to deliver the closing package to Flagstar Bank after
     closing.

5.   Loan will be post-closed by Flagstar Bank. If there are any post closing
     errors, your Errors and Omissions report will be updated on our Web site.

*    In order to prepare your own closing package, your company must complete a Live WebEx on WBCD (Web-Based
     Closing Docs) for approval.
       Additional Helpful Hints
•   Government Underwriting has the capability of
    conducting a videoconference with the processor,
    loan officer or both. To utilize this feature, contact
    technology.consulting@flagstar.com.

•   Government Underwriting Support can be contacted
    at (800) 447-7181, option 2.

•   E-mail Government Underwriting at
    governmentuw@flagstar.com for additional
    guidelines or technical support issues.

				
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Description: Mortgage Application Credit Explanation Letter document sample