Lender Assessment Subsystem LASS

1
U.S. Department of Housing Urban Development
Lender Assessment Subsystem(LASS)
2
Introductions
3
AGENDA

• LASS Overview
• Regulations Resources
• Registration
• Lenders Submission Creating Submission

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AGENDA (continued)

• IPA Attestation
• Lenders Submission Submit to HUD
• HUDs Review of Submission
• LASS Contacts

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LASS OVERVIEW
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What is LASS?

• Lender Assessment Subsystem (LASS)
• Electronically receives, collects, assesses, and
  certifies financial, compliance and performance
  related information of FHA-approved
  Non-Supervised Mortgagees and Loan Correspondents
• Web based system

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Purpose of LASS

• Annual Recertification Process
• Replacement of manual process
• Requirements have not changed, just the process
• No paper submissions necessary and they will not
  be accepted
• Exception Subsidiaries

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Purpose of LASS (continued)

• Extension Requests
• Submit request electronically to HUD through LASS
• Notified electronically of grant/rejection via
  LASS inbox

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LASS Features Lender Benefits

• Provides electronic collection of audited
  financial and compliance data for
• More timely review of submissions to speed
  recertification process
• Effective management of extension requests and
  late submissions
• Effective management of compliance with HUD
  program requirements

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LASS Features Lender Benefits (continued)

• Increased communication between HUD and the FHA
  lending community
• Prompt identification of noncompliant lenders who
  threaten the reputation of the industry
• Uses a web-based solution to facilitate timely
  submission of approximately 7,500 non-supervised
  lenders

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REGULATIONS RESOURCES
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Lender Regulations

• 24 CFR Parts 5 and 202 Uniform Financial
  Reporting Standards (UFRS)
• Mandatory electronic filing of required annual
  financial and compliance data for all Title I and
  Title II Mortgagees and Loan Correspondents with
  FYE 902 and after
• 24 CFR Part 202
• Regulations for recertification

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Lender Regulations (continued)

• Management Letter 94-6
• Extension Request

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CPA Regulations/Resources

• HUD Consolidated Audit Guide - http//www.hud.gov/
  offices/oig/reports/auditguides.cfm
• Generally Accepted Government Auditing Standards
  (Yellowbook) www.gao.gov

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Registration
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Getting Started

• Netscape 4.76 or Internet Explorer 5.0

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FHA Connection (Lender)

• Lenders Mortgagees use FHA Connection to access
  LASS
• FHA Connection Current Features
• Single Family Origination
• Single Family Servicing
• Property Improvement/Manufactured Housing
• Lender Approval
• Multi-Family Systems

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FHA Connection (Lender) (continued)

• Approved Lender with an ID and password can enter
  through the FHA Connection through the LASS
  Website
• Approved lender without ID or password must
  register at https//entp.hud.gov/clas/

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FHA Connection Roles (Lender)

• Two types of FHA Connection Roles
• Application Coordinator Role
• Standard User Role
• Each role requires a separate User ID

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FHA ID Characteristics (Lender)

• ID is assigned to the person who registers, not
  the organization under which s/he registers
• One ID per person
• Each ID is associated with a social security
  number
• ID cannot be shared by multiple people

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FHA ID Characteristics (Lender) (continued)

• Passwords All passwords are case sensitive
• FHA passwords can be reset by contacting Home
  Ownership Center (HOC) or email SFADMIN_at_hud.gov

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Application Coordinator Role (Lender)

• Supply authorization for different applications
  to employees within the organization
• Each Lender organization must designate at least
  one Application Coordinator (maximum 2 per
  Lender)

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Application Coordinator Role (Lender) (continued)

• Reset standard user passwords
• Grant FHA Authorization Rights
• Terminate a User ID
• Can only be Coordinator or User at one lending
  institution

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Application Coordinator Role (Lender) (continued)

• Application Coordinator approves and assigns the
  following LASS roles
• Lender Submitter Role
• Auditor Submitter Role
• IPA Attestation Role
• Roles assigned through FHA Connection ID
  Maintenance link

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Standard User Role (Lender)

• Submits and/or retrieves required program info
  via FHA Connection, as authorized by the
  Application Coordinator
• No limit on number of Standard User ID assigned
  per Lender

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Lender Submitter

• Approved by Application Coordinator (including
  the Application Coordinator if they will be a
  Lender Submitter)
• Must be employee of Lender
• Allows data entry of the Lender financial and
  compliance data within LASS
• Final LASS submission to HUD

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Secure Systems (Auditors)

• Auditors use Secure Systems to access LASS
• Individual auditor must have Independent User ID
• Each ID is associated with a social security
  number
• ID cannot be shared by multiple people

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Secured Systems Roles (Auditors)

• Two types of Secured Systems Roles
• Auditor Submitter
• Independent Public Accountant (IPA)

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Auditor Submitter (Auditor)

• Approved by Application Coordinator
• Allows data entry of the Lender financial and
  compliance data within LASS on behalf of the
  Lender
• Must have an Independent User ID

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Auditor Submitter (Auditor) (continued)

• Same individual cannot be an Auditor Submitter
  and IPA
• Access LASS through Secured Systems
• Cannot submit Lenders submission to IPA or HUD

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Independent Public Accountant (Auditor)

• Approved by Application Coordinator
• Allows an IPA to attest to the electronic
  submission
• Same individual cannot be an Auditor Submitter
  and IPA

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Independent Public Accountant (continued)

• Access LASS through Secured Systems
• Individual auditor must have an Independent User
  ID

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Obtaining Independent User ID (Auditor)

• Auditors who need a Secure Systems Independent
  User ID
• Apply for ID at www.hud.gov/offices/reac/online_re
  asyst.cfm
• Contact Application Coordinator to request
  ability to do business for that lending
  institution

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Obtaining Independent User ID (continued)

• Application Coordinator assigns rights
• Auditors already registered with Secured Systems
  will lose their Secured Systems Coordinator
  rights when converted to an Independent User ID

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Registering for UII (Auditor)

• Firm must have Unique IPA Identifier (UII)
• Each office needs a UII number
• If EIN/ZIP code combination is different for
  additional offices, additional UII numbers needed
• If your firm doesnt have an UII, register at
  www.hud.gov/offices/reac/online_reasyst.cfm

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LASS Roles Summary

• Lender Submitter
• Allows data entry of the Lender financial and
  compliance data through FHA Connection
• Final submission to HUD
• Approved by Application Coordinator

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LASS Roles Summary (continued)

• Auditor Submitter
• Only allows data entry of the Lender financial
  and compliance data through Secure Systems
• Approved by Application Coordinator

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LASS Roles Summary (continued)

• IPA
• Allows authorization to perform attestation on
  financial and compliance data
• Upon completion of attestation, all submission
  are sent electronically to the Lender submitter
  for final submission to HUD
• Approved by Application Coordinator

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Lenders Submission Creating Submission
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Logging onto LASS

• Lender Submitters use FHA Connection
• Auditor Submitters use Secure Systems
• IPA cannot assist Lender with creating submission

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Requesting Extension

• Apply via LASS no earlier than 45 days prior to
  the lenders submission due date and no later
  than 15 days prior to the lenders submission due
  date
• HUD will notify lender via LASS

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Creating a Submission

• Log onto system Auditor or Lender Submitter
• To create a new submission
• Select Create a New Submission simply click
• Verify lender info page

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Lender Info Screen
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Creating a Submission

• To create a new submission (cont.)
• Complete submission
• Financial Data Template
• Data Collection Form
• Notes Findings

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Financial Data Template

• Financial Data Template (FDT) includes
• Balance Sheet
• Operations and RE
• Cash Flows
• Net Worth
• Liquidity

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Financial Data Template Screen
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Data Collection Form

• The Data Collection Form collects information
  from the lender
• General Information
• Collects lender and their CPA
• Firm (financial statement
• auditor) profile information

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Data Collection Form (continued)

• Financial Information
• Collects financial compliance information
• a) Type of audit and audit opinion
• b) Instances of Reportable condition
• c) Instances of Material Weakness and
• d) Instances of Material noncompliance.

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Data Collection Form Screen
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Notes

• Notes section includes
• Footnotes
• Audit Findings
• Action Plan
• File must be in Rich Text Format

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Notes Findings Screen
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Submit to IPA for Attestation

• Auditor Submitter cannot submit to IPA
• Completion Submission test simply click
• Submission must be sent to IPA for attestation
  simply click
• Notify IPA to review submission
• Once submitted, lender will have read-only access
  only

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IPA Attestation
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IPA Attestation

• IPA performing the Attestation cannot be same
  individual assigned as an Auditor Submitter
• Logs onto LASS via Secure Systems
• Select the lender to be reviewed from inbox

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IPA Attestation (continued)

• Type of Attestation Report
• IPA Performed Audit of Lender Financial
  Statements
• IPA did not Perform Audit of Lender Financial
  Statements

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IPA Procedures

• Reviews and compare the submission to the
  hardcopy audited financial statements
• FDT
• DCF
• Net Worth Liquidity
• Attachments

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IPA Procedures (continued)

• Complete the Independent Accountants Report on
  Applying Agreed Upon Procedures
• Lender Name
• Fiscal Year End, if applicable
• Date of hardcopy financial statements auditors
  opinion, if applicable
• Date of SAS 29 attestation report

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IPA Procedures (continued)

• Complete Procedures related to
• FDT
• DCF
• Compliance Opinion
• Footnotes
• Audit Findings, if applicable
• Corrective Action Plan, if applicable

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IPA Procedures (continued)

• Agree or Disagree with the procedures above
• Complete information about the IPA
• Return submission to Lender simply click

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Lenders Submission Submit to HUD
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Lender Submits to HUD

• Results of IPA Attestation
• IPA Agrees with Submission
• IPA Disagrees with Submission

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Lender Submits to HUD (continued)

• IPA Agrees with Submission
• Lender certifies to the completeness of their
  Submission
• Lender submits their data to HUD
• If submission was transmitted correctly
  Submission Successfully Submitted to HUD
  appears

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Lender Submits to HUD (continued)

• IPA Disagrees with Submission
• Correct submission
• Resubmit to IPA for Attestation

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HUDs Review of Submission
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HUD Reviews Submission

• Submission is reviewed internally by HUD
• Lender can check their LASS inbox for submission
  status
• Review
• Complete
• Reject
• Deficient

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HUD Reviews Submission (continued)

• Late Submissions
• Deficient Status
• Lenders inbox will state Review Cure

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Submission Status Reject

• Lender Notified electronically through LASS and
  by Certified Mail
• Rejection reasons within submission
• Rejection Process
• Lender/Auditor Submitter corrects submission
• Creates new submission
• Edit submission

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Submission Status Reject (continued)

• IPA performs attestation and Lender submits to
  HUD within 30 days
• HUD reviews submission
• Accept
• Deficient
• If within the 30 days of the initial rejection,
  lender is able to submit
• If not within the 30 days of initial rejection,
  lender subject to withdrawal

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Submission Status Deficient

• Submission is Deficient
• Lender Notified electronically through LASS and
  by Certified Mail
• Deficiency reasons also stated within submission
• Cure Process
• Cannot change submission
• Produce, attach and submit Cure to HUD within
  30 days

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Submission Status Deficient (continued)

• HUD reviews Cure
• Sufficient
• Insufficient
• If within the 30 days of the initial deficiency,
  lender is able to submit another cure
• If not within the 30 days of initial deficiency,
  lender subject to withdrawal

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Withdrawal of Lender

• Lender is sent withdrawal letter
• Withdrawal Process
• Appeal Process
• Lenders continuing responsibilities

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LASS Contacts
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Contacts for Lender Assistance

• By Phone
• Home Ownership Center
• Atlanta 1-888-696-4687
• Philadelphia 1-215-656-0578
• Denver 1-800-543-9378
• Santa Ana 1-800-827-5605

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Contacts for Lender Assistance (continued)

• By Email
• FHA Connections Help sfadmin_at_hud.gov
• LASS Questions LASS_at_hud.gov
• On the Web
• LASS Website http//www.hud.gov/offices/hsg/sfh/la
  ss/prodlass.cfm
• FHA Connections User Guide
• Lender Registration User Guide
• User Authorization Guide
• LASS User Guide
• FDT Line Definition Guide

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Contacts for Auditor Assistance

• By Phone
• Technical Assistance Center
• Before April 16 1-888-245-4860
• After April 15 1-202-755-7400 Extension 163
• By Email
• LASS Questions LASS_at_hud.gov

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Contacts for Auditor Assistance (continued)

• On the Web
• LASS Website
• http//www.hud.gov/offices/hsg/sfh/lass/
• prodlass.cfm
• UII Registration Information
• Secured Systems Registration Instructions
• LASS User Guide

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LASS Summary

• HUDs web-based solution for quick annual
  reporting package submissions by FHA approved
  lenders
• On-line tracking status of the lenders
  submission available 24/7
• Better communication response between HUD and the
  FHA lending community

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LASS Summary (continued)

• Focus HUD resources more effectively and improve
  HUDs oversight and monitoring capabilities
• Prompt identification of noncompliant lenders who
  threaten the reputation of the industry
• LASS Website http//www.hud.gov/offices/hsg/sfh/la
  ss/
• prodlass.cfm

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QUESTIONS