FHA Amends Timeframe for Conducting Pre-Endorsement Mortgage Reviews for Unconditional Direct Endorsement Authority

FHA issued Mortgagee Letter 2016-21, amending the timeframe for conducting a pre-endorsement mortgage review during the test case phase of the Direct Endorsement Unconditional Authority process. FHA grants mortgagees the opportunity to obtain Unconditional Direct Endorsement authority to close mortgages without prior FHA approval. To obtain Unconditional Direct Endorsement authority, a mortgagee must successfully complete a test case phase, which is generally conducted prior to closing. The Mortgagee Letter moves the test case phase from pre-closing to post-closing. In addition, the Mortgagee Letter updates guidance related to the test case phase. The Mortgagee Letter applies to mortgages originated by mortgagees who receive a Direct Endorsement program test case phase approval letter from HUD’s Homeownership Center dated on or after April 1, 2017.

Click here to view the FHA Mortgagee Letter