Frequently Asked Questions

Q:  I thought FHA did not allow DE Underwriters to underwrite loans for anyone other than their employer?

A:  FHA allows Full-Eagle lenders to contract with other Full-Eagle lenders for services such as underwriting. This could be for every-day business, loan volume increases, specialized products, sick employees, etc. This Principal – Authorized Agent relationship is available for both forward and reverse residential mortgage loan programs.

Q:  What does America's Underwriter do to help evaluate and reduce risk for the lender it is underwriting loans for?

A:  America's Underwriter provides free an automated risk assessment tool on each loan we take in for full underwriting. FraudGUARD® from INTERTHINX delivers a combined solution to mortgage loan risk by analyzing a loan’s collateral, borrower and agent to determine if the transaction is sound or likely to result in a costly default. This report is made available to other parties in the transaction that have a need to validate and verify data.

Q:  What is the purpose of having post closing loan file reviews?

A:  FHA, VA, FNMA, FHLMC and most other investors require that all mortgage brokers/bankers with whom they do business have quality assurance reviews conducted on a percentage of their closed loan files plus a review on 100% of all rejected / declined loans. The post closing loan file review is a quality control tool that helps to assure:

Compliance with the investor’s and the mortgagee's own origination or servicing requirements throughout its operations;

Protect the mortgagee and investor from unacceptable risk;

Guard against errors, omissions and fraud; and

Assure swift and appropriate corrective action by management.

Q:  As an FHA-approved mortgagee, can I conduct my own post closing loan file reviews?

A:  In order for a post closing review to be acceptable for measuring the quality of the loan, most investors require that it be conducted by someone who is knowledgeable about but is NOT INVOLVED in the mortgage origination, processing or underwriting phases of the loan. For FHA loans, HUD requires the mortgagee to maintain a qualified staff and the files “must be reviewed for compliance with HUD underwriting requirements, sufficiency of documentation and the soundness of underwriting judgments”, therefore anyone doing the underwriting review should also hold a Direct Endorsement designation from FHA. All underwriting done at USA Underwriters is with DE Underwriters.

Q:  Does HUD allow me to contract out for my post closing loan file reviews?

A:  FHA allows approved mortgagees to contract with outside firms to conduct their post closing file reviews. The approved mortgagee is responsible to ensure that the contractor complies with the HUD quality assurance requirements in conducting the reviews. America's Underwriter is a division of American Reverse Mortgage, an approved mortgagee by FHA (Full-Eagle).

Q:  What is the penalty that HUD may take if an approved mortgagee/Loan Correspondent doesn't have post closing loan file reviews done?

A:  HUD may make a "finding" against the approved mortgagee which could result in referral to the Mortgagee Review Board (MRB) in Washington, DC.  The MRB can take sanctions against the approved mortgagee including monetary penalties and disciplinary action up to suspension and loss of authority to originate FHA loans.

Q:  Is it necessary to have written reports of the post closing loan file reviews?

A:  The Quality Control review report and follow-up, including review findings and actions taken, plus procedural information (such as the percentage of loans reviewed, basis for selecting loans, and who performed the review) must be retained by the mortgagee for a period of two years.  These records must be made available to HUD on request.

Sixth (6) Largest FHA HECM Lender in U.S. for 2007

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