FHA Revises 4000.1 Manual | Weiner Brodsky Kider PC
In the last Manual 4000.1 Transmission, the FHA has announced several updates that include, but are not limited to, the following highlights:
- Clarify mortgage lender approval policies and align manual policy wording with applicable regulations; and
- Updated the case workbook submission requirements for the Title II DE Authority test case phase.
- Update the required documentation and calculate the monthly obligations required for student loans by LM 2021-13 and adding an exception for student loans in forbearance related to COVID-19;
- Incorporate an exception granted through a manual waiver that allows individual unit owners and the condominium association to obtain and maintain insurance coverage as required by the governing documents for certain types of property. condominium projects; and
- Updated protocols regarding the transfer of control from developer or manufacturer to unit owners.
- Update of the effective date of Section III Annex 4.0 and 5.0, extending the implementation date contained in LM 2021-14;
- Review the guidelines for voluntary termination of mortgage loan insurance;
- Updated COVID-19 forbearance and early loan modification guidelines by LM 2021-15;
- Require that requests for exceeding maximum asset preservation allocations be submitted at least five days prior to transfer.
- Alternative Documentation Clarification HUD will accept as proof of tax payment for claims review.
- Update guidelines on the number of prepayment defaults that require appraisal review and clarify property appraisal quality control review requirements to align with property acceptability criteria and the appraiser and property requirements for Title II term and reverse mortgages, e.g. LM 2021-17;
- Added language to require unapproved mortgages for eCaseBinder submission via FHA connection to use the FHA catalyst: Case Binding Module to submit both Front and Back Single Family Case Binders (HECM) requested through the Loan Review System for post-endorsement technical review; and
- Clarify existing policy to demonstrate that required documents are dated to demonstrate compliance with retention and reporting deadlines.
The changes identified in Section II.A of Handbook 4000.1 can be implemented immediately, but must be implemented for mortgages with assigned file numbers on or after September 20, 2021. Unless otherwise noted, all other changes can be implemented immediately, but must be implemented no later than September 20, 2021.