The Department of Housing and Urban Development is opening the door for more Federal Housing Administration-approved lenders to use its new automated underwriting system, TOTAL Scorecard.The FHA has been testing the scorecard -- TOTAL stands for "technology open to approved lenders" -- with a few lenders and Fannie Mae. But under an interim rule dated Nov. 21, HUD is making it available to FHA direct-endorsement lenders. "Although use of the TOTAL Scorecard is not required, the Department believes that this rule makes use of the TOTAL Scorecard possible for a greater number of mortgagees, and for the benefit of a greater number of mortgagors," the interim rule says. HUD is imposing several conditions on lenders that opt to use the FHA scorecard, including the requirement that lenders manually underwrite loans when a borrower gets flagged as "refer" by the scorecard.

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