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FHA Scorecard Goes Automated

March 18, 2004

Fannie announces its DU can use TOTAL to determine eligibility

By Coco Salazar

Insurance eligibility based on FHA's TOTAL Mortgage Scorecard can now be determined by the automated underwriting systems of the nations' secondary mortgage lenders.

Fannie Mae announced Monday that Federal Housing Administration- (FHA-) approved lenders using its automated underwriting system -- Desktop Underwriter -- can now use the TOTAL (Technology Open to Approved Lenders) Mortgage Scorecard to determine FHA insurance eligibility. FHA's Scorecard works with DU to provide a recommended level of underwriting and documentation and enables the automated underwriting system to determine eligibility, said the mortgage giant.

"We applaud Fannie Mae for getting this rolled out well in advance ... to give lenders the ability to be on board for the May 1st deadline," said Tim Doyle, director of government affairs for the Mortgage Bankers Association of America -- the industry's primary trade group.

On the deadline date, FHA will require that all electronically underwritten single-family mortgages seeking its insurance be risk assessed by TOTAL. Fannie said it has worked closely with the U.S. Department of Housing and Urban Development (HUD) to refine the Scorecard, which has been under development for the past five years.

In an e-mailed statement to, HUD, the oversight agency for both Fannie and top competitor Freddie Mac, said Fannie was the first to test TOTAL with real loans submitted by test lenders.

"We encouraged both Fannie and Freddie to be first," added HUD, but "Fannie got there first as far as availability across the spectrum of their lender clients."

Although Freddie implemented the TOTAL Scorecard into its automated underwriting system -- Loan Prospector -- on Feb. 22, it is still "transitioning" its lenders to the TOTAL system, said company spokeswoman Patti Boerger, in an e-mailed statement. TOTAL will be broadly available to LP users by the deadline, she added.

FHA loan types that TOTAL can assess through DU include fixed rate and adjustable rate FHA loan programs for purchase money mortgages, cashout refinances and streamlined refinances, said the Washington D.C.-based lender.

Fannie Mae also pointed out that although its owned pmiAURASM Scorecard will be completely replaced by TOTAL for underwriting FHA loans, it will continue to be the risk assessor for VA loans.


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