FHA Total Scorecard

What is the FHA Total Score Card program?

The FHA (Federal Housing Administration) announced the deployment of TOTAL (Technology Open to Approved Lenders) Scoreboard for Mortgages. This FHA TOTAL Scoreboard, which is developed by HUD for evaluation of the credit risk of the various FHA loans, will be submitted to an automated underwriting system.

The application by the mortgagee must be submitted to the automated underwriting system to process it and underwrite it. Once submitted electronically to the system, the system automatically communicates with the FHA TOTAL scoreboard and would process for the eligibility of underwriting. This would lessen the process for obtaining the underwriting and also know whether the mortgagee would be eligible. The mortgagee must also complete in full about the details of the FHA mortgage loan that would enable the system to compute the eligibility criteria.

There are several reasons behind developing the FHA TOTAL scoreboard. FHA had developed their own scoreboard since there were several methods adopted by different lenders to evaluate and make their underwriting. The FHA TOTAL scoreboard would ensure that all the applicants for the FHA loan insurance would be evaluated by the same scoring process and not different yardsticks regardless of the AUS vendor who is submitting the loan application. This is the primary reason for the development of the FHA TOTAL scoreboard.

Secondly, the TOTAL scoreboard would enhance FHA’s ability to manage and assess certain risks. The FHA system will capture the data from the TOTAL scoreboard, study and analyze the trends and make policy changes appropriately. The third reason for the development of FHA TOTAL scoreboard will ensure that no individual borrower will be denied a FHA insured mortgage loan purely on the basis of a refer classification of an AUS.

The TOTAL scoreboard will provide you with two risk calculations either Accept/Approve or Refer. In the case of Accept/Approve risk classification it would indicate that the FHA would ensure the borrowers loan with less documentation. In the case of the Refer classification, the lender will have to underwrite the loan manually.

After understanding the various details about the TOTAL scoreboard, one must understand how this TOTAL scoreboard works. The FHA TOTAL scoreboard is completely an Internet based program and will provide you a real time response to your applications. The AUS provider will have to build a XML based interface with the TOTAL scoreboard. AUS would call the TOTAL scoreboard and once the call is made the FHA TOTAL scoreboard will evaluate the mortgage credit, and make a recommendation of either to accept/approve or to refer and then this recommendation is provided to the AUS.

The AUS service provider will provide this recommendation with the necessary feedback message from the FHA to the lender. This process is done on every mortgage loan application by the AUS service provider to the FHA TOTAL scoreboard and once they get the recommendation they would send the suitable information to the respective lender.