The Federal
Housing Administration (FHA) is pleased to announce the deployment of the Technology
Open to Approved Lenders (TOTAL) Mortgage Scorecard. What
is the FHA TOTAL Scorecard? The
FHA TOTAL Scorecard was developed by HUD to evaluate the credit risk of FHA loans
that are submitted to an automated underwriting system. To underwrite an FHA loan
electronically, a mortgagee must process the request through an automated underwriting
system that can communicate with the FHA TOTAL Scorecard. Why
was the FHA TOTAL Scorecard developed? FHA
was interested in developing our own scorecard for a number of reasons.
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The
FHA TOTAL Scorecard will ensure that applicants for FHA loan insurance are evaluated
by the same scoring process regardless of the AUS vendor submitting the loan. |
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Second,
TOTAL will enhance FHA's ability to assess and manage risk. FHA systems will capture
TOTAL Scorecard data and allow us to study and analyze trends and make policy
changes when appropriate. |
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Third,
TOTAL will ensure that no borrower will be denied an FHA insured mortgage loan
on the basis of a refer classification by an AUS. The TOTAL Scorecard provides
two risk classifications: Accept/Approve or Refer. An "Accept/Approve" indicates
that FHA will ensure the borrower's loan with reduced documentation. If the loan
receives a "Refer" classification", the lender will be required to manually underwrite
the loan. |
How
does the Scorecard work?
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The
TOTAL Scorecard is internet-based and provides a real time response. |
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The
AUS provider must build an XML-based interface to TOTAL Scorecard. |
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AUS
"calls" the TOTAL Scorecard. |
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TOTAL
evaluates mortgage credit, makes a recommendation of accept or refer and provides
recommendation to AUS. AUS provides recommendation with feedback messages to the
lender. |
The
following documents provide additional information regarding the use of the FHA
TOTAL Scorecard: FAQs:
Frequently Asked Questions (FAQs) is a document that provides answers to questions
HUD staff have received regarding the FHA TOTAL Scorecard.
User
Guide: The User Guide is a compilation of credit policies and
documentation requirements that lenders must follow when using the
FHA TOTAL Scorecard. The User Guide is compiled into Mortgagee Letter
2004-01. (The user guide was updated on 12/30/04 with the publication
of FHA Mortgagee Letter 2004-47,
TOTAL Mortgage Scorecard User Guide Update.)
Developer's
Guide : The Developer's Guide provides the necessary information to establish
an interface between the FHA's TOTAL Scorecard and an Automated Underwriting System
(AUS). This document is primarily aimed at the software development and maintenance
staff supporting an AUS.
Interim Rule
FR-4835-I-01: This interim rule codifies the procedures that mortgages and
automated underwriting system vendors must observe if they opt to use the FHA
TOTAL Scorecard.
contact the Homeownership Center
that services your area. Contact
FHA for assistance: If
you have any questions regarding the FHA TOTAL Scorecard or require additional
information, please visit the
FHA Resource Center.
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