What system will a Mortgagee use to communicate with HUD regarding defects noted in mortgagee monitoring and post endorsement loan reviews?

For all mortgagee monitoring and loan reviews that were selected by FHA on or after May 15, 2017:
The Loan Review System (LRS) will be the primary means for FHA and Mortgagees to communicate on defects noted in compliance reviews.

FHA will document the results of each review in the Loan Review System and will use its Single Family Housing Loan Quality Assessment Methodology (Defect Taxonomy) to identify and capture detailed information about any Findings related to compliance with FHA underwriting requirements. FHA will specify the remedies and response that are required from the Mortgagee. The Mortgagee must respond to any Material Findings using the functions provided in the LRS.
Mortgagees will be able to submit written responses in LRS to any defects noted by HUD and to upload mitigating documentation as necessary. In addition, LRS will allow Mortgagees to submit indemnification agreements directly to HUD on any defects rated as “unacceptable” that they are unable to mitigate.
The Loan Review System (LRS) will not contain historical information for Mortgagee monitoring or loan reviews started on or before May 14, 2017.

For reviews already in process on or before May 14, 2017:
The Mortgagee will continue to use the FHA Connection/Underwriting Review System (URS) through the resolution of reviewing findings.
For additional information see:

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-01132