Module 3: FHA & VA Loan Setup

FHA Case Number

An FHA case number is a unique identifier for a mortgage loan that is insured by the Federal Housing Administration (FHA). The FHA case number is assigned by the FHA when the loan is approved and is used to track the loan throughout the life of the loan. The FHA case number is typically 10 digits long.

The FHA case number is important for several reasons. First, it is used to track the loan throughout the life of the loan. This means that the FHA can easily access information about the loan, such as the borrower's name, address, and loan amount. Second, the FHA case number is used to identify the loan when the borrower makes a payment. This ensures that the payment is credited to the correct loan. Third, the FHA case number is used to identify the loan when the borrower refinances or sells the property.

FHA Refinance Authorization

An FHA Refinance Authorization is a document that allows a borrower to refinance their existing FHA-insured mortgage loan. The FHA Refinance Authorization is issued by the FHA and is required by the lender in order to process the refinance.

The FHA Refinance Authorization is typically completed by the borrower's lender. The lender will then submit the FHA Refinance Authorization to the FHA for approval. Once the FHA approves the FHA Refinance Authorization, the lender can proceed with the refinance.

Here are some additional points to keep in mind about the FHA Refinance Authorization:

• The FHA Refinance Authorization is typically valid for120 days.

• The FHA Refinance Authorization can be revoked by the FHA at any time.

• The borrower is responsible for paying all of the closing costs associated with the refinance.

• The borrower may be required to pay a prepayment penalty if they pay off their loan early.

To pull a Refinance Authorization through Encompass, the old FHA Case Number is necessary. This document will allow the lender to obtain the figures of the unearned UFMIP, original property value, and original endorsement date. The Refinance Authorization can be obtained through the FHA Connection portal.

CAIVRS (Credit Alert Verification Reporting System)

CAIVRS was developed by the Department of Housing and Urban Development in June 1987 as a shared database of defaulted Federal debtors and enables processors of applications for Federal credit benefits to identify individuals who are in default or have had claims paid on direct or guaranteed Federal loans or are delinquent or other debts owed to Federal agencies.

In 1989, the Office of Management and Budget set a performance goal that certain program agencies and their authorized financial institutions should use CAIVRS to conduct prescreening to determine a loan applicant's credit status with the Federal Government. This methodology enables the program agencies to prescreen their borrowers and to broaden the Federal Government's base in determining an applicant's creditworthiness. Some non-tangible factors are:

• Verifying that loan applicants are not in default or delinquent on direct or guaranteed loans of participating Federal programs as required by OMB Circular A -129.

• Providing authorized users with a means to prescreen applicants for Federal credit benefits, to avoid extending benefits to individuals who are credit risks.

• Demonstrating to the public the Federal Government's commitment to collecting delinquent debt and the importance of meeting Federal Obligations.

FHA Appraisal Logging

FHA Appraisal Logging is a process used by the Federal Housing Administration (FHA) to track the appraisal process for FHA-insured mortgages. The FHA Appraisal Logging system is used to ensure that appraisals are completed in a timely manner and that the appraisals meet FHA requirements.

Appraisal logging on the FHA Connection allows a lender to log, add, change, or review appraisal information in HUD’s origination system for non-endorsed cases. Appraisal logging is required except for streamline refinance cases that do not require an appraisal. If the case requires an appraisal, appraisal logging must be processed before submitting the Insurance application. After a case is endorsed for insurance, appraisal information can only be viewed.

VA Certificate of Eligibility

A VA Certificate of Eligibility (COE) is a document that shows that a person is eligible for a VA mortgage loan. The COE is issued by the U.S. Department of Veterans Affairs (VA) and is required by lenders when borrowers apply for a VA loan.

To obtain a VA COE, the borrower must meet certain eligibility requirements, which include:

• Must be a U.S. citizen or a permanent resident alien.

• Must have served on active duty in the U.S. military for at least 90 days, with at least one day during wartime.

• Must have received a service-connected disability rating from the VA.

• Must not have been dishonorably discharged from the military.

The COE needs to be pulled from the VA portal. In order to request a COE, the lender must have the veteran’s social security number and year of birth.

VA Appraisal Order

On VA loans, appraisals are not ordered through Encompass/Mercury/AMC. The VA assigns a licensed VA appraiser. The appraisal cannot be sent to the borrower/agents until a VA SAR underwriter reviews and issues the Notice of Value (NOV).

The funds to pay for the appraisal are collected at escrow/close. After a loan has been funded/withdrawn/denied, an email request must be sent to the Accounting Department (along with the appraisal invoice and appraiser’s W-9) so the appraiser can get paid.