Lenders mandated to make use of FHA Catalyst for value determinations
From March 14, 2022 the Federal Housing Administration (FHA) requires that all lenders use FHA Catalyst for ratings. The module can also accept appraisals for Home Equity Conversion Mortgages (HECMs), the administration announced last week.
The FHA Catalyst: Electronic Appraisal Delivery module enables the administration to expand its data acquisition and analysis options. In the meantime, lenders can electronically submit, track, and manage single-family home reviews, the FHA said.
The announcement comes after more than a year of efforts by the FHA to streamline and modernize their FHA lending and claims process.
Last year the module was introduced as a pilot project with no set transition period for lenders.
According to the administration, this gave the mortgage holders and their designated technology service providers time to “make any necessary adjustments to their systems and processes, including onboarding activities.”
Now the administration prescribes the use of the platform from next year. For cases with an earlier submission of the assessment to the old EAD, the FHA allows the re-submission of the assessment via the old EAD portal until April 15, 2022.
After this date, however, reviews must be submitted via Catalyst for all cases, regardless of previous submissions. In the meantime, lenders with HECM cases can start using the module right away, the administration said.
The FHA Catalyst platform was a bright spot in the Housing and Urban Development Departmentoutdated IT structures.
A report by the HUD Office of Inspector General published earlier this year states: “To date, FHA Catalyst has been named the most successful project because of its increased efficiency and cost savings.”
Once fully deployed, the platform will enable at least 11 legacy HUD IT systems to be decommissioned, saving nearly $ 20 million annually, IG added.
In the report, IG warned that the success of FHA Catalyst “depends on several factors that pose a potential risk,” one of which is “leadership change.” [that] has resulted in a shift in focus from the continued delivery of FHA Catalyst modules and improvements to other Program Office priorities. “
“This change not only affects the HUD, but affects the industry as well, as it has already committed, allocated and started integrating FHA Catalyst into its business processes,” the IG noted.