FHA Insured VHDA Loans

To: VHDA Originating Lenders

Date: March 10, 2004

 

 

HUD defines an “Authorized Agent” (your company) as a HUD approved mortgagee that is designated by another approved mortgagee (Principal-VHDA) for the purpose of originating insured mortgages and submitting mortgage insurance applications in the name of and on behalf of the Principal under a Principal-Agent relationship.

To comply with HUD requirements in Mortgagee Letter 2003-17 dated October 16, 2003, VHDA has registered all FHA approved VHDA lenders in the FHA Connection as our “Agents”.

All approved lenders that originate FHA insured loans must register VHDA as a “Principal” in the FHA Connection. Please follow the following instructions:

1. Enter the FHA Connection
2. Click on “Single Family”
3. Click on “Lender Approval”
4. Click on “Authorized Agent Relationships” under Title II
5. Select “View as Agent” at bottom right of screen
6. Select “Add a Principal” at the top under Existing Relationships
7. Enter VHDA’s FHA ID #545-210-9999

When an FHA loan is closed in VHDA’s name, the MIC must be provided in VHDA’s name. HUD has issued the following instructions:

1. When ordering a case number, enter VHDA’s FHA ID#545-210-9999 in the “Originator” field. Your (Agent) FHA ID number must be entered in the “Sponsor/Agent” field.
2. The loan must close in VHDA’s name.
3. The MIC will be issued in VHDA’s name. VHDA or the Agent will be able to access the MIC on the FHA Connection.

When an FHA loan is funded by VHDA, yet closed in your name, the case number should have been ordered using your FHA ID number. (As a reminder, even though the FHA Plus second mortgage is an uninsured conventional loan, it must ALWAYS close in VHDA’s name.)

Anytime a case number is ordered in your name, whether or not the loan is closed in VHDA’s name, a Mortgage Records Change (MRC) must be submitted by the holder of record to HUD transferring the loan to VHDA within 15 days after closing. This will accurately update HUD’s records to insure the MIC will be issued in VHDA’s name. A copy of the MRC must be provided to VHDA in the closed loan package.

HUD does not allow Correspondents to be authorized “Agents”. These lenders must order the FHA case number using VHDA’s FHA ID #545-210-9999 as the Principal, and their Sponsor’s FHA ID number as the “Agent”. The loan should be closed in VHDA’s name.

HUD has stated that inaccurate or untimely reporting of MRC directly impacts the payment of claims for insurance benefits. HUD also states that the current holder of record must submit the MRC. The current servicer will not be able to submit an MRC to correct the holder of record. Therefore, any closed FHA loan package that was funded by VHDA must contain an MRC dated within 15 days after closing if the case number was ordered using your FHA ID number.

All lenders are expected to comply with requirements of insuring agencies. Therefore, please immediately begin following the above instructions. VHDA will require copies of MRC’s in loan packages closed on or after April 1, 2004. HUD states programming changes to the Claim system to allow only the current holder of record to be paid a claim are anticipated to be completed by June 2004.

Please contact Sheila Pollard at 804-343-5976, or sheila.pollard@vhda.com if you have questions or concerns.