{"id":9723,"date":"2009-09-11T12:33:21","date_gmt":"2009-09-11T19:33:21","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=9723"},"modified":"2009-09-11T22:25:03","modified_gmt":"2009-09-12T05:25:03","slug":"why-your-fha-decision-engine-approval-gets-denied","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/9723\/why-your-fha-decision-engine-approval-gets-denied\/","title":{"rendered":"Why Your FHA Decision Engine Approval Gets Denied"},"content":{"rendered":"<p>The occurrence of FHA loans receiving an FHA TOTAL Scorecard approval and subsequently having the loan denied once it hits the underwriter\u2019s desk is happening more and more. It\u2019s a reality the field must acknowledge and from what I have seen, the good originators have taken note and have adjusted their game accordingly.<\/p>\n<p>However, before adjusting your game, you must understand the reasoning behind why this is happening and will continue to occur in the future. Quite frankly, it is at this execution juncture point, that the details and actions of originators are what separate the superstars from the rest of the pack.<\/p>\n<p>The Reason<\/p>\n<p>While the technical reason behind this shift has been in place for years, the enforcement has not until recently. In a nutshell, HUD has stepped up their post endorsement technical reviews and NOT letting lenders insure loans they allowed in the past. In short, previously they were letting lenders slide and NOW they are NOT!<\/p>\n<p>HUD has from the beginning made it clear to lenders that regardless of the Automated Underwriting System (AUS) findings, it was still the lenders responsibility to ensure the data input to TOTAL Scorecard was accurate as required per FHA guidelines AND also demonstrate if there are factors that could not be determined, measured or quantified by the TOTAL Scorecard decision that would invalidate the initial approval decision.<\/p>\n<p>An example of such, is multiple and excessive Non-Sufficient-Funds (NFS) on the borrowers bank checking statements. Since FHA TOTAL Scorecard cannot measure nor account for NSF\u2019s in their decision (recommendation), they defer this determination of layered risk analysis to their Direct Endorsement (DE) lenders to establish if unaccounted layers of risk invalidate a TOTAL Scorecard approval\/recommendation.<\/p>\n<p>It is important to note a point HUD stresses to lenders on the back-end\u2026the TOTAL Scorecard decision is ONLY a recommendation and it is the responsibility of the DE lender to determine the accuracy of the approve recommendation. Thus, \u201cdue diligence\u201d is the ambiguous \u201cstandard\u201d DE lenders are being held to in regards to TOTAL Scorecard approvals. What this means to originators, Realtors and builders is the \u201capproval\u201d received from TOTAL Scorecard (Fannie and <a href=\"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/9723\/why-your-fha-decision-engine-approval-gets-denied\/#more-9723\" class=\"more-link\">Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The occurrence of FHA loans receiving an FHA TOTAL Scorecard approval and subsequently having the loan denied once it hits the underwriter\u2019s desk is happening more and more. It\u2019s a reality the field must acknowledge and from what I have seen, the good originators have taken note and have adjusted their game accordingly. However, before [&hellip;]<\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26,6,5],"tags":[354],"class_list":{"0":"post-9723","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-lending","7":"category-marketing","8":"category-real-estate","9":"tag-fha","11":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1382,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1382\/fha-streamlined-refinance-loans-originators-git-you-some\/","url_meta":{"origin":9723,"position":0},"title":"FHA Streamlined Refinance Loans: Originators, Git You Some !","author":"Brian Brady","date":"May 3, 2007","format":false,"excerpt":"Loan originators, subprime mortgage blues got you down in the dumps? Let's talk about a way to get your pipeline phat again. I'm going to give you a step-by-step plan to start, what Todd Duncan calls, the 90-day burn. If you follow these steps, and you don't close 10 loans\u2026","rel":"","context":"In &quot;Real Estate&quot;","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4751,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4751\/va-and-fha-higher-loan-limit-extension-through-2011-the-main-street-bailout\/","url_meta":{"origin":9723,"position":1},"title":"VA and FHA Higher Loan Limit Extension Through 2011: The Main Street Bailout","author":"Brian Brady","date":"September 30, 2008","format":false,"excerpt":"We don't have a \"Main Street\" in Southern California; we have the US Route 101 (or CA State Highway #1). We call it the Coast Highway, the Pacific Coast Highway, or the PCH.\u00a0 When I think of a bailout plan for Main Street, I think of it for homes within\u2026","rel":"","context":"In &quot;Lending&quot;","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4858,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4858\/will-mortgage-brokers-be-the-hope-for-homeowners\/","url_meta":{"origin":9723,"position":2},"title":"Will Mortgage Brokers Be the Hope For Homeowners?","author":"Brian Brady","date":"October 8, 2008","format":false,"excerpt":"The FHA Hope For Homeowners program was designed for existing homeowners, struggling with mortgage payments and an \"upside-down\" equity position in their primary residence.\u00a0 It is a new program with lots of misinformation.\u00a0 Some believe it can only be offered by existing loan servicers, some think only participating lender\/servicers can\u2026","rel":"","context":"In &quot;Lending&quot;","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7903,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/7903\/fha-and-va-assumable-loans-offer-an-exit-strategy-for-todays-buyers\/","url_meta":{"origin":9723,"position":3},"title":"FHA and VA Assumable Loans Offer an Exit Strategy For Today&#8217;s Buyers","author":"Brian Brady","date":"April 16, 2009","format":false,"excerpt":"How can an FHA mortgage or VA home loan sell a home faster?\u00a0\u00a0 When mortgage rates are 10% and the 5% government loan is assumable. I've taken a few pokes at the contributors on Active Rain; John MacArthur isn't one of them.\u00a0 John is a Branch Manager with Long and\u2026","rel":"","context":"In &quot;Lending&quot;","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3265,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3265\/down-payment-gift-programs-yea-or-nay\/","url_meta":{"origin":9723,"position":4},"title":"Down Payment Gift Programs: Yea or Nay?","author":"Sean Purcell","date":"June 25, 2008","format":false,"excerpt":"On June 9th, in a speech to the National Press Club, FHA Commissioner Brian D. Montgomery announced that his agency plans to create new regulations banning the use of down payment gift programs.\u00a0 The most popular of these programs is The Nehemiah Program and you can go to their site\u00a0for\u2026","rel":"","context":"In &quot;Lending&quot;","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":9880,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/9880\/fha-broker-approval-delegated-to-approved-de-lenders-will-this-squeeze-out-smaller-players\/","url_meta":{"origin":9723,"position":5},"title":"FHA Broker Approval Delegated to Approved DE Lenders: Will This Squeeze Out Smaller Players?","author":"Tony Gallegos","date":"September 28, 2009","format":false,"excerpt":"Over the last eight days, calls from my clients and mortgage associates having been growing on a daily basis concerning the recent announcement by the FHA delegating mortgage broker approval to originate FHA loans to approved DE lenders. Quite frankly, many small lenders and mortgage brokers are concerned the mega-lenders\u2026","rel":"","context":"In &quot;General&quot;","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/9723","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=9723"}],"version-history":[{"count":2,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/9723\/revisions"}],"predecessor-version":[{"id":9741,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/9723\/revisions\/9741"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=9723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=9723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=9723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}