The Federal Housing Administration is making FHA mortgages easier.
The Department of Housing and Urban Development said Monday two appraisal-related forms are being eliminated and appraisal protocol is being updated in order to reduce burdensome and duplicative paperwork on FHA-insured loans
As part of the initiative, FHA will adopt four of Fannie Mae's appraisal reporting forms, which were recently revised and are now considered the industry standard, HUD said.
"Streamlining our appraisal procedures, which in turn benefits homebuyers, is another of our efforts to make FHA easier to deal with for the lending industry," said Federal Housing Commissioner Brian Montgomery in the announcement.
HUD noted that the Valuation Conditions form will no longer be used because FHA has determined that new property reporting requirements on the revised Fannie and Freddie Mac appraisal forms satisfy any concerns regarding the physical property conditions of a home, and thus can serve to estimate property market value.
A second move also announced Monday was the implementation of the Lender Insurance Program. The new program will enable high-performing lenders to endorse FHA mortgage loans for insurance without a pre-endorsement review by HUD, cutting processing time by one-third and decreasing direct insuring expense by as much as 25 percent.
Instead of transmitting insuring data and mail paper case binders to HUDs Homeownership Centers before loans are insured, the new program allows companies to handle the endorsement themselves and to send electronic case binders to HUD only when requested, the announcement said.
Wells Fargo Home Mortgage, reportedly the nation's largest FHA lender, participated with HUD in a pilot procedure of the program.
"Lender Insurance is an innovative and revolutionary change to the FHA insuring process, which brings tremendous industrywide benefits to HUD and lenders alike," said Michael Levine, Wells senior vice president, in HUDs announcement.
The Mortgage Bankers Association said in the announcement the Lender Insurance initiative will "significantly lower costs and streamline the process for originating FHA loans."