In accordance with HUD’s Single Family Housing Policy Handbook 4000.1 II.A.1.i.(B) (the “Handbook”) and Mortgagee Letter 2016-06, FHA Mortgagees must use the updated HUD Form 92900-A (the “Form”) for all loan applications with case numbers assigned on or after August 1, 2016. The updated Form includes several revisions to loan-level certifications. While a number of these revised certifications are set forth below, all such changes are not discussed in this alert. As such, it is recommended that all FHA Mortgagees carefully review the changes prior to the Form’s effective date of August 1, 2016. The revised version of the Form can be found at:
http://portal.hud.gov/hudportal/documents/huddoc?id=16-06mlatch.pdf
The Form will include separate lender certifications regarding the accuracy of the information contained in the initial and final Loan Applications and Addendums (see Row 1 of the below table). The Form will also require certifications regarding rent, mortgage, employment and deposit verifications (see Row 2 of the below table). Further, the updated Form removes the Lender certification with regard to income and credit requirements. However, the updated Form contains a new underwriter certification related to income and credit requirements (see Row 3 of the below table). Finally, the updated Form expands the Lender’s certification with regard to suspensions, debarments and limited denials of participation to include other Participants as defined under the Handbook (see Row 4 of the below table).
Current Form 92900-A | Updated Form 92900-A effective 8/1/2016 | |
1 | B. The information contained in the Uniform Residential Loan Application and this Addendum was obtained directly from the borrower by an employee of the undersigned lender or its duly authorized agent and is true to the best of the lender’s knowledge and belief | B. (1) The information contained in the initial Uniform Residential Loan Application and this Addendum was obtained from the Borrower by an employee of the undersigned lender/mortgagee or its duly authorized agent and to the best of lender/mortgagee’s knowledge is complete and accurately represents the information obtained by the lender/mortgagee as of the date the Borrower provided the information to the undersigned lender/mortgagee or its duly authorized agent. (2) The information contained in the final Uniform Residential Loan Application, which was signed by the Borrower at the time of settlement, was obtained by an employee of the undersigned lender/mortgagee or its duly authorized agent and to the best of lender/mortgagee’s knowledge is complete and accurately represents the information obtained by the lender/mortgagee as of the date verified by the lender/mortgagee |
2 | D. The verification of employment and verification of deposits were requested and received by the lender or its duly authorized agent without passing through the hands of any third persons and are true to the best of the lender’s knowledge and belief | D. The Verifications of Employment, Deposit, Rent and Mortgage, as applicable, were requested and received by the lender/mortgagee or its duly authorized agent without passing through the hands of the Borrower or any Interested Third Party and are to the best of lender/mortgagee’s knowledge accurate. |
3 | F. This proposed loan to the named borrower meets the income and credit requirements of the governing law in the judgment of the undersigned. | Removed from Lender/Mortgagee Certification section on page 1. On page 3 of the updated Form the Direct Endorsement (“DE”) Underwriter must now certify “I have performed all Specific Underwriter Responsibilities for Underwriters and my underwriting of the borrower’s Credit and Debt, Income, Qualifying Ratios and Compensating Factors, if any, and the borrower’s DTI with Compensating Factors, if any, are within the parameters established by FHA and the borrower has assets to satisfy any required down payment and closing costs of this mortgage” in the event the mortgage is rated as a “refer” by a FHA’s TOTAL Mortgage Scorecard or if it is manually underwritten. |
4 | G. To the best of my knowledge and belief, I and my firm and its principals: (1) are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any Federal department or agency; (2) have not, within a three-year period preceding this proposal, been convicted of or had a civil judgment rendered against them for (a) commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State or local) transaction or contract under a public transaction; (b) violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; (3) are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State or local) with commission of any of the offenses enumerated in paragraph G(2) of this certification; and (4) have not, within a three-year period preceding this application/proposal, had one or more public transactions (Federal, State or local) terminated for cause or default. | E. To the best of my knowledge, neither I nor any other Participant (as that term is clarified in HUD Handbook 4000.1, II.A.1.b.ii.(B)) in this Covered Transaction (as that term is clarified at 2 C.F.R. § 180. 200) is suspended, debarred, under a limited denial of participation, or otherwise restricted under 2 C.F.R. part 2424 or 24 C.F.R. part 25, or under similar procedures of any other federal agency. |
In addition to revisions to lender certifications, the updated Form revises borrower and underwriter certifications. Specifically, the new Form removes the inquiry whether the borrower owns more than four dwellings. Further, the borrower must certify whether they (i) will occupy the property within 60 days and intend to continue occupancy for at least one year; or (ii) does not intend to occupy the property as their primary residence.
With regard to underwriter certifications, the new Form requires a DE Underwriter to certify that the mortgage was rated as an “accept” or “approve” by FHA’s TOTAL Mortgage Scorecard and that the DE Underwriter personally reviewed the appraisal according to standard FHA requirements. If the mortgage was rated a “refer” or was manually underwritten, the DE underwriter must now make additional certifications indicating compliance with various standards outlined in the Handbook. The updated Form also requires the DE Underwriter’s signature and CHUMS ID number.
The updated Form includes several other changes. For example, there is a new section for FHA Sponsored Originations that includes fields for the name of the loan origination company, as well as its Tax ID and NMLS number. Further, the Additional Conditions section outlined on page 3 of the original form has been removed. The Mortgagee’s Certification section on page 4 of the updated Form now only references loan approval conditions appearing in any outstanding commitment issued, rather than those also appearing on the Form.
Given the substantial revisions, it is recommended that all FHA Mortgagees carefully review the changes prior to the Form’s effective date of August 1, 2016.