source:
  type: guide
  id: hud-4000-1-v-c-origination-and-underwriting-case-binder-compliance-review
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part V — c. Origination
    and Underwriting Case Binder Compliance Review (05/09/2022)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part V — c. Origination
    and Underwriting Case Binder Compliance Review (05/09/2022).
  coverage_tier: operative
obligations:
- id: hud-4000-1-v-c-origination-and-underwriting-case-binder-compliance-review-full
  canonical_id: hud-4000-1-v-c-origination-and-underwriting-case-binder-compliance-review-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part V — c. Origination
    and Underwriting Case Binder Compliance Review (05/09/2022)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part V — c. Origination
      and Underwriting Case Binder Compliance Review (05/09/2022)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: 'c. Origination and Underwriting Case Binder Compliance Review
      (05/09/2022) i. Minimum Requirements At a minimum, Mortgagees must include the
      following areas in their QC review to ensure they meet the requirements outlined
      in the Title II Insured Housing Programs Forward Mortgages section or the Title
      I Insured Programs - Property Improvement Loan Program or Manufactured Home
      Loan Program section(s): Requirement TII Pre- closing Review TII Post- closing
      Review Title I Review Appraisal ✓ ✓ ✓ Mortgage application, eligibility, and
      underwriting documents ✓ ✓ ✓ Disclosures and legal compliance ✓ ✓ ✓ Mortgage
      origination documents ✓ ✓ ✓ Handling of mortgage documents ✓ ✓ ✓ Borrower occupancy
      ✓ ✓* Credit reports ✓ ✓ ✓ Outstanding debt obligations ✓ ✓ ✓ V. QUALITY CONTROL,
      OVERSIGHT, AND COMPLIANCE A. Quality Control of Lenders and Mortgagees 3. Loan
      Level Quality Control Program Requirements Handbook 4000.1 1709 Last Revised:
      11/26/2025 Requirement TII Pre- closing Review TII Post- closing Review Title
      I Review Verifications of employment and deposit ✓ ✓ ✓ Self-employed Borrowers
      ✓ ✓ ✓ Borrower’s source of funds ✓ ✓ ✓ Underwriting accuracy and completeness,
      including compensating factors ✓ ✓ ✓ Property improvement loan completion certificates
      and inspections of completed improvements ✓ Form HUD-56002-MH, Placement Certificate
      for Manufactured Home, and site- of-placement inspection ✓** Property improvement
      loan proceeds use eligibility ✓ Post-Disbursement inspections on property improvements
      or manufactured home installation ✓ Property Flipping restrictions ✓ ✓ Prohibited
      restrictive covenants ✓ ✓ Qualified Mortgage (QM) ✓ ✓ Loan estimate ✓ ✓ ✓ Discrepancies
      in the case binder ✓ ✓ ✓ Condition clearance ✓ ✓ ✓ Closing procedures and documents
      ✓ ✓ Closing Disclosure or other similar legal document ✓ ✓ Pre-endorsement review
      ✓ Timely submission for insurance ✓ ✓ * Applies when the Property is a Manufactured
      Home (including Manufactured Homes with a Property Improvement Loan) ** Applies
      only to Manufactured Home Loans ii. Document Review and Reverification A Mortgagee’s
      QC Plan for origination and underwriting must provide for the review and reverification
      of the following information on all FHA-insured Mortgages selected for pre-closing
      and post-closing review, unless otherwise specified below. V. QUALITY CONTROL,
      OVERSIGHT, AND COMPLIANCE A. Quality Control of Lenders and Mortgagees 3. Loan
      Level Quality Control Program Requirements Handbook 4000.1 1710 Last Revised:
      11/26/2025 (A) Credit Report (1) Standard For all post-closing reviews, the
      Mortgagee must obtain a new credit report in the same form as the original credit
      report used to approve the Mortgage, including a Residential Mortgage Credit
      Report (RMCR), a Tri-Merged Credit Report (TRMCR), or, when appropriate, a business
      credit report for each Borrower whose FHA-insured Mortgage is selected for review.
      The new credit report must comply with the credit report standards described
      in the Credit Report(s) section. The Mortgagee must compare the new credit report
      obtained with the original credit report used to approve the Mortgage, and determine
      whether any discrepancies exist between the reports that may adversely affect
      the Borrower’s eligibility to qualify for an FHA-insured Mortgage. If discrepancies
      exist between the credit reports that may adversely affect the Borrower’s eligibility
      to qualify for an FHA-insured Mortgage, then the Mortgagee must obtain a second,
      full RMCR. (2) Exceptions A new credit report does not have to be obtained for
      pre-closing reviews, or for non-credit qualifying Streamline Refinances. (3)
      Required Documentation The Mortgagee must retain a copy of the new credit report(s).
      (B) Income, Employment, Asset, and Housing Expense Information (1) Reverification
      (a) Standard For all post-closing reviews, the Mortgagee must analyze the validity
      and sufficiency of all documents contained in the loan file. The Mortgagee must
      reverify, in writing or electronically if available, the following: • employment;
      • income; • assets; • gift funds; • source of funds; and • Mortgage Payments
      or rental payments. If a written or electronic reverification request is not
      returned to the Mortgagee, the Mortgagee must attempt a telephone reverification.
      Reverification is not required for pre-closing reviews. V. QUALITY CONTROL,
      OVERSIGHT, AND COMPLIANCE A. Quality Control of Lenders and Mortgagees 3. Loan
      Level Quality Control Program Requirements Handbook 4000.1 1711 Last Revised:
      11/26/2025 (b) Required Documentation The Mortgagee must retain evidence of
      the written, electronic, or telephone verification, and document the due diligence.
      (2) Discrepancies (a) Standard The Mortgagee must evaluate all discrepancies
      to ensure that the original documents (except blanket verification releases)
      were completed before being signed, were as represented, were not handled by
      Interested Parties, and that all corrections were proper and initialed. All
      conflicting information in the original documentation must be resolved with
      the underwriter. Discrepancies in documentation discovered during pre-closing
      reviews must be resolved prior to closing. (i) Exception for Mortgagees and
      Third-Party Originators The Mortgagee and TPO are permitted to handle reverifications,
      provided the Mortgagee or TPO is not the seller, real estate agent, builder,
      or developer. (b) Required Documentation The Mortgagee must document any discrepancies
      and retain copies of information used to resolve such discrepancies. (C) Property
      and Appraisals (1) Standard (a) Property and Appraisal Reviews For all FHA-insured
      Mortgages selected by the Mortgagee for origination and underwriting QC review,
      the Mortgagee must evaluate all Property documentation and the appraisal report
      used to support the Property Value and eligibility for FHA insurance. At a minimum,
      the Mortgagee must review all Property documentation and the appraisal report
      for completeness, technical accuracy, and overall quality in compliance with
      Property Acceptability Criteria and Appraiser and Property Requirements for
      Title II Forward and Reverse Mortgages. (b) Field Reviews The Mortgagee must
      obtain appraisal field reviews on at least 10 percent of FHA-insured Mortgages
      selected for origination and underwriting QC review. V. QUALITY CONTROL, OVERSIGHT,
      AND COMPLIANCE A. Quality Control of Lenders and Mortgagees 3. Loan Level Quality
      Control Program Requirements Handbook 4000.1 1712 Last Revised: 11/26/2025 The
      Mortgagee’s appraisal field review sample must include the following, even if
      inclusion of these Mortgages results in a field review sample that exceeds 10
      percent of FHA-insured Mortgages selected for origination and underwriting QC
      review: • at least 10 percent of EPDs underwritten by the Mortgagee, which must
      be randomly selected from the overall EPD population; • all Mortgages selected
      by the Mortgagee for QC review based on a Property or appraisal-related discretionary
      sample; • all Mortgages for which the Mortgagee has received a Property complaint
      from the Borrower(s); and • all Mortgages with unaddressed red flags, discrepancies,
      inconsistencies, or valuation issues found by the Mortgagee through its QC review
      of the Property documentation and appraisal report. The Mortgagee may include
      random sample selections in its appraisal field review sample if necessary to
      meet the overall 10 percent requirement. Field reviews must be performed by
      Appraisers listed on the FHA Appraiser Roster and must be reported on the applicable
      Residential Appraisal Field Review Report form. (2) Exceptions Mortgagees are
      not required to perform the property and appraisal QC review, including any
      appraisal field review, for Streamline Refinances where the Mortgagee was not
      required to order a new appraisal for a Property financed with an FHA-insured
      Mortgage. Appraisal field reviews are not required for pre-closing property
      and appraisal QC reviews. (3) Required Documentation The Mortgagee must retain
      all results from the property and appraisal QC reviews required by this section,
      including appraisal field reviews. Results include all selection criteria, review
      documentation, Findings, and actions taken to mitigate Findings. (D) Title I
      Loan Disbursement (1) Standard For all QC post-closing and Early Payment Default
      (EPD) reviews of Title I Insured Programs- Manufactured Home Loan Program and
      Property Improvement Loan Program, the Title I Lender must determine that the
      Disbursement of loan proceeds was adequately documented in the case binder and
      the Disbursement was completed in accordance with FHA requirements. The Title
      Lender must also V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE A. Quality Control
      of Lenders and Mortgagees 3. Loan Level Quality Control Program Requirements
      Handbook 4000.1 1713 Last Revised: 11/26/2025 determine that Disbursements to
      a Borrower or Dealer were made in accordance with FHA requirements. (2) Required
      Documentation The Title Lender must document any discrepancies and retain copies
      of information used to resolve such discrepancies.'
  judgment: false
