Bulletin 2023-072 FHA Underwriting Guideline Updates - FHA Connection
Newrez LLC "Newrez" Approved Correspondent Clients; this update is effective for all cases pending endorsement on or after September 11, 2023.
FHA Underwriting Guideline Updates - FHA Connection
In an effort to improve access to credit for qualified borrowers, FHA issued a waiver (FHA INFO 2023-75) to the requirement that FHA-approved mortgagees flag rejected loans in the FHA Connection (FHAC) system.
Previously, when a mortgagee rejected a borrower’s application, the denial information was required to be entered into the Mortgage Credit Reject (MCR) screen in FHAC. This action generated a warning flag associated with both the case number and the borrower for a 6-month period that would then require a review by the Homeownership Center (HOC) when a borrower applied for an FHA loan with another lender. FHA determined this flag did not improve risk management and was often why other lenders rejected an applicant even when that applicant might otherwise qualify for a loan.
By waiving this requirement, FHA will no longer require lenders to enter rejection information in FHAC, streamlining the underwriting process and removing unnecessary barriers for borrowers. With this update, the MCR screen in FHAC will no longer be available.