What is the Loan Review System (LRS)?

The Loan Review System (LRS) is the electronic platform for FHA’s Title II Single Family Mortgagee monitoring and loan review processes including:
  • Various Post-Endorsement Loan Reviews
  • Unconditional Direct Endorsement Authority Test Cases
  • Lender Monitoring Reviews
  • Lender Self-Reporting of Fraud and Other Material Findings.
FHA will document the results of each review in LRS and will use its Single Family Housing Policy Handbook 4000.1, Appendix 7.0 – FHA Defect Taxonomy to identify and capture detailed information about any unacceptable Findings related to compliance with FHA underwriting requirements. For each unacceptable Finding in the LRS, FHA will request a response and specify the allowable remedy(s) that are required from the Mortgagee. The Mortgagee must resolve each unacceptable Finding using the functions provided in LRS.
 
Instructions for addressing Findings, submitting self-reports and using other LRS functions are outlined in the LRS User Manual, which is available at:
https://www.hud.gov/sites/dfiles/SFH/documents/LRSUserManual.pdf
 
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-03854