D. FHA Connection

The FHA Connection is an interactive portal on the Internet that provides approved FHA lenders real-time access to several FHA systems, including FHA's Computerized Homes Underwriting Management System (CHUMS)

Reference: For more information, see the FHA Connection User Guide on the FHA Connection.

Direct Endorsement (DE) lenders must use FHA Connection to electronically

• process case number assignments, inspector assignments, appraisal information, and case cancellations (until the process is updated), and
• receive
• insurance, and
• loan data.

Note: Home Ownership Centers (HOCs) will not accept telephone or mail requests for case numbers, case status, or other actions that can be performed by the lender through the FHA Connection.

The FHA Connection provides lenders with the ability to perform the following transactions electronically:

• request
• FHA case number assignments
• appraiser assignments
• case queries
• refinance authorizations
• insurance
• inspector assignments
• loan data
• case cancellations (until the process is updated)
• Credit Alert Interactive Voice Response System (CAIVRS) authorizations
• Reports, and
• HECM insurance
• transfer cases to other lenders or sponsors
• query approval lists
• create
• Institutional Master File (IMF) sponsor relationships, and
• Authorized agents for Title II
• register
• underwriters, and
• automated underwriting systems
• change IMF addresses
• inquiry IMF addresses, and
• add Title I and Title II branches.

A Help ? icon is located on the upper right hand corner of each FHA Connection screen to assist the user. The Help window describes the system

• functions
• data entry fields
• valid data entries, and
• information that is returned to the user upon performing various functions.

Note: The Help screens should be consulted prior to calling FHA for help with the data entry fields.

FHA Connection users receive immediate feedback, in the form of an electronic error message, on reasons for possible non-insurance. Lenders must correct any errors before cases are submitted for insurance.

Reference: For information on the types of error messages that must be corrected by the lender prior to submitting the case binder for insurance, see the FHA Connection User Guide.

For all cases, including Home Equity Conversion Mortgages (HECMs)

• the appraiser must send his/her appraisal and one copy to the lender (the appraiser should not mail the appraisal to the HOC), and
• the lender is required to enter the appraisal information into the FHA Connection prior to receiving insurance

When mailing the HUD case binder to the HOC, the DE lender must include the original appraisal and copy provided by the appraiser.

Note: Lenders originating HECM loans enter the appraisal information into FHA Connection in order for the system to calculate the mortgage insurance premium (MIP).

The FHA Connection Business-to-Government (FHAC B2G) specification allows lenders to transmit data directly from their own internal loan processing systems to FHA without rekeying data into the FHA Connection or functional equivalent.

B2G reduces the data entry burden for lenders and allows for efficient transmission of large volumes of data to FHA. The FHAC B2G Guide and a list of available functions and enhancements may be found at http://www.hud.gov/offices/hsg...

The FHA Connection is accessed on the Internet

• from the HUD Web site at www.hud.gov, or
• at https://entp.hud.gov/clas.

Also available at the HUD Web site are the

• FHA User Guide, with in-depth instructions on using the portal, and
• Mortgagee Packet, which describes the functions available to lenders.

A user ID is necessary to sign onto the FHA Connection portal. The two types of user IDs that are issued are the

• Application Coordinator ID, and
• Standard ID.

Each lender must designate, at the corporate level, an Application Coordinator prior to requesting standard IDs.

Note: A maximum of two Application Coordinator IDs may be issued per lender at the corporate level.

The table below describes the stages in the process for obtaining Application Coordinator and standard user IDs.

Lenders must request and obtain an FHA case number using the FHA Connection or its functional equivalent.

The lender must also use the FHA Connection to transmit any additional FHA information on a particular property.

Lenders must fax a cancellation request, specifying the reason for cancellation, to the appropriate HOC to close outstanding files and cancel an FHA case number if

• an appraisal has not been completed and the borrower will not close the loan as an FHA loan
• the FHA mortgage insurance will not be sought, or
• the appraisal has already expired.

Reference: For information on requesting an FHA case number, see HUD 4155.2 1.D.3.

FHA's systems (FHAC/CHUMS) automatically cancel an uninsured case number 13 months after the last action taken on the loan/case.

If a case number has been canceled, and FHA insurance will be sought, the lender must fax a request to the appropriate HOC, requesting that the case number be reinstated to an active status.

Transferring lenders are expected to cooperate in the transfer of case numbers. At a borrower's request, the lender must assign the case number to the new lender using the Case Transfer function in the FHA Connection. Additionally, the transferring lender

• is not entitled to a fee for the transfer of a streamline refinance case number, regardless of the current stage of processing for the loan
• may be entitled to any lock-in fee collected from a borrower at the time of application
• is required to provide the new lender with the appraisal, but is not required to provide any processing documents.

Note: If processing documents are provided, the lender

• must negotiate the fee with the new lender, and
• is not authorized to charge the borrower a separate fee for the transfer of the processing documents.

Reference: For more information on the FHA Connection, see HUD 4155.2 1.D.2.

If a case number transfer involves a new borrower using an existing appraisal, the new lender

• collects an appraisal fee from the new borrower, and
• sends the fee to the original lender, who, in turn, refunds the fee to the original borrower.

If the transfer involves a rejected loan, the original lender must complete the Mortgage Credit Reject function in FHA Connection prior to transferring the loan.

Reference: For more information on the FHA Connection, see HUD 4155.2 1.D.2.

If a case number transfer involves a Form HUD 91322.1 , Master Appraisal Report (MAR), the transferring lender is only entitled to a pro-rata share of the cost of the MAR.

While a lender may have provided resources to obtain the MAR in anticipation of capturing most if not all of the individual mortgage loans, it may not deny an appraisal assignment request to a borrower who wishes to use an alternative mortgage lender.

Example: If the MAR is for 100 units at a cost of $10,000, the new lender pays the transferring lender $100.