AU Systems Need FHA Link by May First
All automated underwriting systems must be linked to the Federal Housing Administration's TOTAL Scorecard by May 1 to continue processing FHA single-family loans, according to the Department of Housing and Urban Development.
"The Total Mortgage Scorecard will replace the existing proprietary scorecards offered by Fannie Mae and Freddie Mac for use on mortgages to be insured by FHA," a HUD mortgagee letter says. (TOTAL stands for Technology Open To Approved Lenders.)
HUD has been developing its underwriting scorecard for the past five years and Fannie and individual lenders have been testing it in their AU systems for the past six months. HUD has already issued an interim final rule that sets out the ground rules for Total Scorecard and a technical bulletin.
The mortgagee letter puts all AU system providers on notice that May 1 is the deadline for connecting to TOTAL Scorecard, according to the Mortgage Bankers Association's Tim Doyle.
Lenders can still manually underwrite FHA loans.
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