FHA Mortgage Credit Examiner

Written By: Bonnie Wilt-Hild
Senior DE Underwriter & NAMP Instructor

Very recently there has been a lot of interest as well as questions as to what a certified FHA mortgage credit examiner would do in the world of mortgage lending so I thought I would clarify a few things for those individuals who have yet to find a concrete answer to their question.

As well all know in order to manually underwrite an FHA insured mortgage as well as an appraisal on behalf of FHA, one must have a Direct Endorsement Underwriting designation most commonly referred to as a CHUMS ID number. Without that designation an underwriter cannot sign the 92900LT, firm commitment or conditional commitment indicating that they completed the property valuation or completed a manual underwrite for the credit review of a loan application that received a refer or caution by Total Scorecard. However, if you have a case that received an Accept or Approve/Eligible when run through Total Scorecard then an FHA Credit Examiner could review the mortgage credit piece of the file without actually having a Direct Endorsement designation.

When underwriting of an FHA insured mortgage application is completed through Total Scorecard and has received an Accept of Approve designation, the case has essentially been deemed a satisfactory risk for HUD purposes and the approval documents required in a FHA case for insurance do not need to be signed by a DE. A credit examiner may complete the mortgage credit analysis review of the case and sign the 92900LT as the credit examiner using ZFHA in place of a CHUMS ID and indicate themselves as the credit examiner on the 92900a pages 3 & 4 as the credit examiner as well. The appraisal, however, still must be underwritten by a DE underwriter as Total Scorecard cannot underwrite the appraisal but everything else in the file, where review is concerned, can be handled by the credit examiner in the case of AUS approvals.

Now, I know a lot of you are thinking that you are perfectly qualified to validate the findings and should pursue this career path so I am here to tell you to put the brakes on and make sure you know what you are doing before you jump into reviewing the mortgage credit analysis piece of these loans. First it is important to remember that just because you have an AUS approval thru Total Scorecard does not mean you have an approval loan. Due diligence always trumps AUS so it is really important to understand underwriting principals where FHA is concerned that you know when it is more appropriate to downgrade your approval to a refer and turn it over to a DE for manual underwriting. Further, circumstances arising in the file may require additional documentation based on due diligence so you want to make sure that you have a handle on when documentation waivers are no longer acceptable otherwise you may end up with a materially deficient file that requires indemnification.

If you are an individual, perhaps senior processor or junior underwriter interested in pursuing this type of career path in the very near future or perhaps you are an underwriter who is looking to move into the FHA game but lack the experience, I strongly recommend training before you pick up your first case as a FHA Credit Examiner. It is important to have a complete picture of the mortgage credit analysis game where FHA is concerned as well as have a solid grasp of the government underwriting mentality which is somewhat different than that of conventional. I hope this helps for those of you interested in this career path and as always, happy underwriting.

Go to FHAcampus.org to check scheduled dates for the FHA Mortgage Credit Examiner webinar.

About the Writer. As an NAMP staff writer, Bonnie serves as a senior instructor for FHA Online University as well maintains a full-time job as Senior DE Underwriter for a major banking institution. If you would like to become a writer for NAMP, please email us at: blog@mortgageprocessor.org.

SOURCE: Published by NAMP Publishing Group, a division of the National Association of Mortgage Processors (http://www.MortgageProcessor.org)