FHA Case Transfers and Case Cancels

Written By: Stacey Sprain,
Certified Ambassador Loan Processor (CALP)

I recently received a suggestion from a reader to address and explain FHA case transfers so this week I am going to honor her suggestion and provide information I think you will find helpful on that topic.

FHA Case assignments are connected with the property address. Therefore, whenever you are working on an FHA transaction where the property falls through and you do not receive the deal involving new borrowers for the same property, you need to request that the case be cancelled by HUD so that it can be re-assigned and utilized if another buyer wishes to apply for FHA financing on the same property in the future.

To request a case cancel, you will need to prepare a written request on company letterhead that includes the following information:

• The case number you are requesting be cancelled
• The borrower names
• Address of the subject property
• Appraisal date or note that appraisal was never completed
• Appraiser name & license id
• Your name and title
• Your signature and date
• Your contact information
• Reason for request for cancellation
• Any supporting documentation for the cancel request

The request needs to be faxed to the HUD Homeownership Center that has jurisdiction over the property.

For states covered under the Atlanta HOC, fax the request to 813-228-2478
For states covered under the Denver HOC, fax the request to 303-672-5210.
For states covered under the Philadelphia HOC, fax the request to
• 215-656-3434 if the property is in DE, DC, MD, MI, PA, VA or WV
• 215-656-3438 if the property is in CT, ME, MA, NH, NJ, NY, OH, RI or VT
For states covered under the Santa Ana HOC, fax the request to 714-796-5519.

If the case is not cancelled, a lender requesting a case assignment for different buyers will receive notification in FHA Connection that there is a case already assigned in FHA Connection. Under those circumstances, the lender will need to request a case transfer from the prior lender.

Each case transfer request should be made in writing from one lender to the next. The transfer request should include the following information:

• The Case number
• The property address
• The new FHA lender id number
• The new FHA lender sponsor id number (if applicable)
• Inclusion of the following verbiage: ABC Lender hereby requests that all rights, title and interest to the FHA case assignment referenced herein be transferred from EXISTING Lender to ABC Lender effective month/date/year.
• ABC Lender Contact information
• ABC Lender authorized signature, title & date

Upon receipt of the request for the case transfer, the receiving lender should immediately comply and complete the case transfer function in FHA Connection.

Follow these steps to complete an FHA Case transfer to another lender:

• Sign on to FHA Connection
• Choose Single Family FHA
• Choose Single Family Origination
• Choose Case Processing
• Scroll down to find and choose Case Transfer
• Enter the FHA Case Number
• Enter the New Originator ID
• Enter a new sponsor/agent id or leave id blank
• Enter the date and click send

You will receive a message that the case transfer has been completed successfully. Print a copy of the screen and provide it to the requesting lender.

You should always be prepared to explain case transfers to your underwriter because it’s the underwriter’s obligation to assure that the case has not been underwritten and declined for a reason that would be of interest to HUD.

Be sure to maintain records of the case transfers that you request and the case transfers you perform in case of audit. If an issue were to arise in the future in which HUD would request explanation of why a particular case was transferred, you want to be able to provide the answers they need.

About the Writer. As one of NAMP's volunteer writers, Stacey Sprain is currently a NAMP member in good standing and is a NAMP Certified Ambassador Loan Processor (CALP). If you would like to become a volunteer writer for NAMP, please email us at: blog@mortgageprocessor.org.