Mortgagees who receive a Direct Endorsement (DE) program Test Case phase approval letter from a HUD Homeownership Center (HOC) must submit all Test Case binders for FHA review post-closing.
The Mortgagee must ensure that:
- all required certifications are executed;
- a complete case file is submitted post-closing that includes all required origination, underwriting, and closing documents as specified in Handbook 4000.1 II.A.7.d Uniform Case binder Stacking Order;
- the documents are placed in a blue binder with a completed front cover, the FHA case number written on the side and bottom tab of the folder, and “TEST CASE” written in large letters on the front of the binder.
As a reminder, prior to the submission of a Test Case binder for FHA review post-closing, Mortgagee’s must ensure that:
- the Insurance Application screen in FHA Connection is completed; and
- the appraisal is uploaded through the EAD portal and the Appraisal Logging screen in FHA Connection is completed.
The HOC will perform a review for compliance with FHA underwriting and closing guidelines. Review results will be documented in accordance with the Title II Loan Reviews/Findings section of Handbook 4000.1 (Section V.C.3.b.iv).
Mortgagees must review and respond to requests using the functions provided in the Loan Review System (LRS).
The HOC will issue either a Firm Commitment (approval), or, a Firm Reject (denial) via a Notice of Return (NOR). A NOR is a notification to the Mortgagee specifying the reason a Mortgage is not currently eligible for endorsement. When a Firm Commitment is issued, the HOC will process the case for endorsement. If a NOR is issued, the Mortgagee must make all necessary corrections and provide all required documentation using LRS before the mortgage can be endorsed. All Mortgagee requests for reconsideration must be received within the 60-Day endorsement submission period or within 30 Days of the issuance of the NOR, whichever is longer. If the request for reconsideration is submitted after this period, the Mortgagee must follow the guidelines for late submission.
For additional information see:
- Handbook 4000.1 I.A.5.a.iii(A)(3)(a) and (B); II.A.5.d.x(B); II.A.7.d.ii(B); II.A.7.d.iii(C); and II.A.7.d.vii available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh
- Loan Review System web page at: https://www.hud.gov/program_offices/housing/sfh/lender/loan_review_system