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b. Title II Mortgagee Monitoring Reviews (04/10/2025)
i. Notice
FHA provides Mortgagees with notice prior to FHA monitoring reviews. Such notice may be transmitted via email to the Mortgagee’s administrative contact, which is described in the Doing Business with FHA section. The Mortgagee may access the Loan Review System (LRS) for detailed information about such monitoring reviews.
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V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE C. Mortgagee Monitoring
2. Institutional Mortgagee Monitoring
ii. Production of Loan Files and Records
Mortgagees must have the files requested by FHA available for review. The Mortgagee must provide all records related to the loans selected for review, including any and all files, whether hard copy or stored, in the Mortgagee’s systems that include data or information on the specific loans identified.
iii. Scope
FHA will, in its sole discretion, determine the scope of any monitoring review. FHA may conduct limited reviews of a Mortgagee’s origination, underwriting, and servicing of FHA-insured Single Family Mortgages, or more comprehensive reviews that include not just the Mortgagee’s files, records, and practices, but also the Mortgagee’s overall operations and policies with respect to Mortgagee relationships, quality control and risk management, escrow administration, wholesale Mortgages, and certain FHA product lines.
iv. Findings
At the conclusion of a monitoring review, FHA will document any identified Findings in the LRS and will specify the remedies and response that are required from the Mortgagee. For reviews of mortgages conducted as part of a monitoring review, results will be documented in accordance with the Title II Loan Reviews Findings section.
Notwithstanding the standard process described above, FHA may refer any Finding for administrative or other enforcement action as described in Referrals for Noncompliance, with or without documenting Findings in the LRS.