Wholesale Lending FHA Procedure

1
Wholesale LendingFHA Procedure
2
One-Time Set-Up

• Verify your company is approved for FHA and is
  sponsored by Flagstar Bank.
• Your corporate office will have this information
  and your HUD-approved ID number.
• Your HUD ID number consists of 10 digits and is
  also your origination ID number.
• Your Sponsor ID number is Flagstar Banks
  HUD-approved ID number and is 7127400001.
• If you are approved by HUD and not currently
  sponsored by Flagstar Bank, contact your local
  account executive for the FHA applications for
  sponsorship.

3
Borrower Interaction/Forms/Signatures

• If you are approved, take a complete and accurate
  loan application from your borrower.
• Verify your loan amount is within the FHA loan
  limit.
• Complete a Good Faith Estimate and Truth in
  Lending. Both disclosures must be dated within
  three days of your initial loan application and
  provided to underwriting at time of submission.
• FHA loan limits are based on property location.
  To verify your loan amount does not exceed the
  FHA Maximum Mortgage Limit refer to
  https//entp.hud.gov/idapp/html/hicostlook.cfm

4
Borrower Interaction/Forms/Signatures

• Obtain copy of borrowers pay stub and calculate
  income on monthly basis. Must determine if
  borrower is hourly, salary, self-employed,
  commissioned etc, and calculate income based on
  FHA income/employment guidelines in the 4155.1Rev
  5 Credit Manual located on our Web site.
• A complete list of the FHA forms and disclosures
  needed for each type of loan transaction is
  located on our website.
• Locate the FHA Credit Manual (4155.1 Rev. 5)
  on our Web site. Log in to our Web site and click
  on Tools and then click on Industry Links. This
  manual is located under Ginnie Mae links.
• FHA Forms and Disclosures. Log in to our Web
  site and click on Sellers Guide, then 9000 Gov
  Guidelines. Click on Doc. 9005 and then choose
  the transaction type at the top of this document
  for a list of required FHA forms and disclosures
  and completion instructions.

5
Submission

• Enter application data into your LOS system and
  export the file to Flagstar Bank Loantrac Web
  site.
• Register as an FHA loan and complete the
  Government Lending section in our Loantrac
  system.
• Send loan data through AUS/Credit Submission.
  Choose either DU or LP. Reminder DU and LP do
  not make the loan decision. The loan data
  entered is automatically sent to the FHA Total
  Scorecard System for a loan decision.
• Obtain findings and credit report through the FHA
  Total Scorecard System and verify data entered
  into system is accurate to the findings data
  (i.e., income, assets, loan amount, rate, PITI
  and reserves).
• Live training is available for Government Loan
  data entry and exporting instructions. Please
  refer to our Web site under Help Training and
  choose Live WebEx Training. You can review the
  current day, upcoming, daily and weekly sessions
  available.

6
Submission

• Determine if Total Scorecard response is Approve,
  Accept or Refer.
• If response is Refer, review Doc. 9340 on our
  Web site for the documentation required for
  underwriting submission. A Refer response for
  credit issues requires explanation letters and/or
  additional documentation to justify approval. A
  Refer response for a ratio issue requires
  compensating factors to justify approval.
• If your loan received an Approve or Accept
  response and the data integrity is accurate, no
  explanation letter is required for any late
  payments on trade lines no collections need to
  be paid and excessive ratios do not require any
  compensating factors for approval. Other
  documentation waivers may apply.
• Doc. 9340. FHA Refer Response Helpful Hints
  Checklist. Log in to our Web site and click on
  Sellers Guide, then 9000 Gov Guidelines. Click
  on Doc. 9340 located under FHA
  Forms/Disclosures/Product Descriptions.

7
Submission

• If the data integrity is accurate and the file
  does not obtain an Approve, Accept or Refer
  response, the loan will automatically be manually
  underwritten.
• Order CAIVR (Credit Alert Interactive Voice
  Response) number for all borrowers through the
  FHA Connection System. Enter the CAIVR in your
  LOS system in order for this information to be
  included on your Mortgage Credit Analysis
  Worksheet.
• A defaulted or claim on the CAIVR number requires
  an exception for approval by underwriting.
• If loan is a refinance or a purchase with
  property address, order Case Number Assignment
  through the FHA Connection System. Not
  applicable if loan submission is for a TBD
  property.

8
Submission

• A CAIVR number and Case Number Assignment are not
  mandatory to obtain a valid response through the
  FHA Total Scorecard System. If the CAIVR number
  and Case Number are not provided at time of loan
  submission, both will be a condition of loan
  approval.
• Choose the Government Underwriting New Submission
  cover sheet from our Loantrac system and provide
  as many documents as possible from the list
  provided on the cover sheet.
• Note. If the FHA Total Scorecard does not return
  an Approve, Accept or Refer response, you will
  not be able to choose the Government Underwriting
  New Submission cover sheet in our Loantrac
  system. You must obtain the cover sheet in our
  Sellers Guide, Doc. 3218, from our Web site.
  Complete the cover sheet and upload or fax it
  with the other submission documents.
• Include a separate cover letter to Underwriting
  if there are any unusual circumstances that will
  assist the underwriter during the underwriting
  process.
• Your submission can include limited documentation
  or as much as you prefer. The more documents that
  are provided up front, the fewer conditions you
  should have on your approval letter.

9
Submission

• Upload or fax your loan documents to Flagstar.
• Underwriting turn time varies from day to day.
  You can check the government turn time hours on
  our Web site for purchases, refinances and
  conditions on a daily basis.
• After the underwriter has made the loan decision,
  you can view the approval letter or denial letter
  in the Loan Information link on our wholesale Web
  site at wholesale.flagstar.com
• An underwriter will call you with the loan
  decision. You can discuss any conditions on the
  approval or discuss the reasons for loan denial
  at this time.
• Once the loan is approved, begin to gather all
  conditions on the loan approval.
• You should order the appraisal at this time
  unless the loan was submitted as a TBD property.
• All required standard forms and/or FHA forms that
  were not included with your submission will be a
  condition on the approval letter.
• When ordering the appraisal, you must make sure
  the appraiser is both FHA-eligible and eligible
  by Flagstar Bank. This information can be found
  at www.wholesale.flagstar.com. Click on Eligible
  Appraiser in the Search link. Locate the FHA
  appraiser under Eligible HUD FHA Appraisers
  first, and then determine if the appraiser is
  Flagstar-eligible using the Search Criteria
  section.

10
Submission

• Any income documentation, asset documentation
  etc., listed in your FHA Total Scorecard findings
  report that was not included with your submission
  will be a condition on the approval letter.
• Review your approval letter and compare your
  conditions to the findings from the FHA Total
  Scorecard findings report. If you have questions
  regarding any conditions, you can contact the
  underwriter or contact the Government
  Underwriting Support Desk at [phone],
  option 2, for additional assistance.
• After all conditions are obtained, upload or fax
  the conditions to Underwriting. Choose the
  Underwriting Conditions Cover sheet from our
  Loantrac system.
• When the conditions have been reviewed by
  underwriting, the status of your loan will be
  updated and you can review the updated approval
  letter in the Loan Info Link on our Web site.
• It is important to send all conditions at one
  time in order to obtain a Clear to Close on your
  loan.

11
Closing

• Once the loan is Clear to Close, read all closing
  instructions carefully and contact Underwriting
  if you have any questions prior to having the
  closing package prepared.
• If you are a broker, you must order your closing
  package through Government Wholesale Lending.
  Closing package order requests can be found on
  our Web site, Doc. 9321. It is important that
  this form be completed in its entirety and
  accurately to avoid any closing delays. If you
  are a correspondent, you can prepare your own
  closing package.
• Set closing date and close loan according to the
  approval letter closing instructions.
• If you are a broker, the closing agent at the
  title company must deliver the closing package to
  Flagstar Bank after closing. If you are a
  correspondent, you are responsible to deliver the
  closing package to Flagstar Bank after closing.
• Loan will be post-closed by Flagstar Bank. If
  there are any post closing errors, your Errors
  and Omissions report will be updated on our Web
  site.
• In order to prepare your own closing package,
  your company must complete a Live WebEx on WBCD
  (Web-Based Closing Docs) for approval.

12
Additional Helpful Hints

• Government Underwriting has the capability of
  conducting a videoconference with the processor,
  loan officer or both. To utilize this feature,
  contact technology.consulting_at_flagstar.com.
• Government Underwriting Support can be contacted
  at [phone], option 2.
• E-mail Government Underwriting at
  governmentuw_at_flagstar.com for additional
  guidelines or technical support issues.