FHA Mortgages

FHA to make appraisal deliveries by means of its new know-how necessary

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The Federal Housing Administration set a date by Wednesday by which all electronic valuations must be submitted through FHA Catalyst, including those conducted in connection with home conversion mortgage loans.

Starting March 14, 2022, submission of electronic reports via FHA Catalyst will be mandatory for single family loans unless an earlier version has been submitted via legacy technology. In cases where older technologies were submitted before March 14, 2022, the older channel can be used until April 15 next year.

The need to leverage the Federal Housing Administration’s cloud-based Catalyst platform for electronic valuation deliveries can expedite the collection of valuation data from a government agency that insured nearly a fifth, or 17%, of all purchase credits in 2020.

The increased data could help shed some light on the reverse mortgage market in particular. The FHA’s HECMs dominate the small market for these specialized equity extraction loans that are given to senior borrowers.

Between the FHA’s ratings database and a similar but separate database created by major government-sponsored secondary mortgage market investors Fannie Mae and Freddie Mac, rating data for the vast majority of home loans in the U.S. market is collected for reference. This could increase the number of cases in which assessment waivers can be used. Disclaimers, which can shorten issuance deadlines and reduce costs, are most commonly used in conjunction with no cash-out refinancing, but collecting valuation information from new purchases is key to getting enough current data to support them.

New users of the FHA Catalyst system for assessment deliveries must go through an onboarding process prior to the mandatory usage date. Mortgage companies or their seller representatives must sign up for direct integrations in the waves scheduled for October, November, and December.

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