In Mortgagee Letter 2020-07, dated April 6, 2020, the U.S. Department of Housing and Urban Development (HUD) announced the acceleration of the development and deployment of the FHA Catalyst system to permit lenders to electronically submit cases binders for endorsement of FHA loans in certain situations in view of the COVID-19 national emergency. HUD states that the “system, while limited in initial functionality, will enable [lenders] and FHA to continue to provide mortgages and mortgage insurance functions critical to the stability of the housing market during this emergency.”

The ability to use the case binder module of FHA Catalyst to submit case binders is limited to certain situations. With forward mortgages, lenders that are Lender Insurance Mortgagees, but not approved for electronic case binder submission through FHA Connection, may use the case binder module of FHA Catalyst to submit (1) case binders for severe case warnings and (2) if the lender has conditional direct endorsement approval, case binders for the initial submission of test cases. With home equity conversion (i.e., reverse) mortgages (HECMs), lenders may use the case binder module of FHA Catalyst for the submission of case biders associated with the endorsement of HECMs for the following processes: the initial case binder submission, notice of return case binder resubmission, and test case binder submission.

HUD notes that the case binder module of FHA Catalyst may not be used for the delivery of forward or HECM case binders selected for post endorsement review.

In a separate mortgage letter, Mortgagee Letter 2020-08, HUD announced the availability of FHA Catalyst for FHA approved lenders and/or their authorized users to electronically transmit supplemental claim packages.

FHA approved lenders may request access to the FHA Catalyst case binder module and claims module via the FHA Resource Center at answers@hud.gov or 1-800-Call FHA (1-800-225-5342).

Copyright © 2020 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.