- immediately report any Findings of fraud and material misrepresentation to FHA; and
- report all other origination, underwriting, or servicing Material Findings that the Mortgagee is unable to mitigate no later than 90 Days after the completion of the initial Findings report.
Findings that do not involve fraud or material misrepresentation and were already mitigated by the Mortgagee do not have to be reported to FHA. For all Findings that must be reported, the Mortgagee must identify what actions have been taken to attempt to mitigate each Finding and report any planned or pending follow-up activities.
FHA may request supporting documentation, including the endorsement case binder, the Quality Control (QC) report, and any other documentation necessary to fully evaluate the Finding.
The Mortgagee must retain all QC review results, including all selection criteria, review documentation, Findings, and actions taken to mitigate Findings, for a period of two years from the initial QC review, or from the last action taken to mitigate Findings, whichever is later.
The LRS does not contain historical information for Mortgagee monitoring or loan reviews started on or before May 14, 2017. Mortgagees can still view lender reports submitted prior to May 15, 2017, by clicking on the “View Previously Saved Lender Reports” link in Neighborhood Watch.
The LRS Lender User Manual can be accessed using the Loan Review System link in the Lender Performance section at: https://www.hud.gov/program_offices/housing/sfh/lender
HUD Handbook 4000.1 V.A.2.d.iv is available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh