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b. Title II Loan Reviews (04/10/2025)
i. Notice
FHA will notify Mortgagees with Lender Insurance (LI) authority daily via email of its intent to review the Mortgagee’s LI case binders. Mortgagees that do not have LI Authority can view loans selected for review in the Loan Review System (LRS) on the Insurance Application screen in FHAC.
ii. Production of Case Binders
If approved to submit electronic Case Binders (eCBs) to FHA, the Mortgagee must submit the case binder using eCB delivery.
Mortgagees not approved to submit eCBs to FHA must provide the requested case binder(s) using the FHA Catalyst: Case Binder Module to FHA.
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V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE C. Mortgagee Monitoring
3. Loan Level Monitoring
All case binders must be submitted to FHA within 10 business days of FHA’s transmittal of a request.
Failure of a Mortgagee with LI Authority to submit requested case binders may result in suspension of the Mortgagee’s LI Authority.
iii. Scope
Title II loan reviews consist of, but are not limited to, the Mortgagee’s compliance with FHA guidelines and an assessment of whether the Mortgage represents an unacceptable level of risk to FHA.
iv. Findings
FHA will document the results of each loan review in the LRS. Any Findings of noncompliance with Title II Insured Housing Program requirements will be identified in accordance with Appendix 8.0 – FHA Defect Taxonomy. For each unacceptable Finding, FHA will request a response and specify allowable remedies from the Mortgagee. The Mortgagee must resolve each unacceptable Finding by submitting a response and remedy requested through the LRS.
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.
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V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE D. Monitoring of Other Participants
1. Appraisers (03/27/2019)