Written By: Glenn Michaels, Op-Ed Writer
The current underwriting manuals HUD 4155.1 and HUD 4155.2 are being replaced by HUD’s Single Family Handbook (SFH) 4000.1
There are approximately 100 changes from the old books to the new book. There are parts of the SFH in effect now and all of the book will be in effect with cases issued on or after September 14, 2015. There are parts of the SFH in effect already with lion share in effect in September 2015.
For those that are unaware the SFH implementation was delayed from June 15, 2015 to September 14, 2015.
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To make matters a little confusing different sections of the SFH are in effect as of June 15. 2015 and other sections become effective as of September 14, 2015.
The following sections of the SFH are effective September 14, 2015.
• Doing Business with FHA – lenders and mortgagees.
• Doing business with FHA – other participants – appraisers.
• Quality Control Oversight and Compliance – lenders and mortgagees except for Section
V.A. 3.C – Origination and Underwriting Loan file Compliance Review. Minimum requirements are effective September 14, 2015.
On September 14, 2015 many of the old mortgagee letters and handbooks will be replaced by SFH 4000.1. The old mortgagee letters that are not being replaced will still be in effect. This is a night mare for underwriters to pick and choose what rule(s) are in effect.
The FHA also stated they will not be issuing a list of changes from the old books and mortgagee letters. However if you review the March 18, 2015 announcement in detail, FHA did highlight in
New FHA underwriters do not have to learn the old mortgagee letters or HUD 4155.1 and HUD 4155.2. They should concentrate on SFH 4000.1 and any new Mortgagee letters.
It took a while, the FHA is now giving instructions in detail how to determine self-employment income, I have had much success usng the Fannie Mae form 1084 to determine the income. The Fannie Mae form Although the new HUD handbook has improved their guidance in calculating the self – employed borrower, I will stick to the FNMA form 1084 form to calculate the income. Then I will do a comparison to the FHA guidance to see if the FNMA 1084 form calculates income based on the FHA guidance.
All FHA Direct Endorsed (DE) underwriter’s should begin reviewing the SFH 4000.1 handbook as it will soon be the FHA bible.
I am about ready to use the new manual, I have been reading the new handbook and have recognized some of the changes from the current handbooks.
DE underwriters get ready, it is coming soon and you have to use SFH 4000.1
About The Author
Glenn Michaels - As an op-ed writer, Glenn Michaels is a mortgage underwriting instructor for CampusUnderwriter (www.MortgageUnderwriter.org). As a BBA & FHA DE Underwriter, Glenn is a Pace University graduate who also graduated from New York University’s School of Mortgage Finance. Glenn has conducted numerous training classes and has worked in the mortgage banking industry for 38 years.