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 firstname.lastname@example.org. • Government Underwriting Support can be contacted at (800) 447-7181, option 2. • E-mail Government Underwriting at email@example.com for additional guidelines or technical support issues.
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