The proposed rule requires that all mortgages be scored through FHAs TOTAL Mortgage Scorecard. Why is that and how does this benefit the lender or the borrower?
First, while risk-based premiums will initially be based on credit bureau score and downpayment amount (and source), FHA plans to further refine the premiums by using TOTAL to determine the premium. Second, because FHA’s premiums are now based on risk, it can lower the accept/refer cut point to allow a greater percentage of mortgages to receive the accept risk classification with all the associated benefits, e.g., documentation relief.
Related Questions
- The proposed rule requires that an operator know its system. Must an operator excavate simply to gather information about parts of its system where it may not now have complete knowledge?
- The proposed rule requires that all mortgages be scored through FHAs TOTAL Mortgage Scorecard. Why is that and how does this benefit the lender or the borrower?
- What type of set-up is required to access the Federal Housing Administration (FHA) TOTAL Mortgage Scorecard?
