Announcement 19-0081: FHA Cash-Out Refinance DU Update Eligibility Message

October 30, 2019

Overview

As a reminder, FHA Mortgagee Letter 2019-011 reduced the maximum allowable LTV and CLTV limits for cash-out refinances from 85% to 80% for all FHA cash-out refinance mortgages with case numbers assigned on or after September 1, 2019.

During the weekend of October 19, 2019, DU was updated to support the new LTV and CLTV limits and the change impacted DU Eligibility. In response, HUD issued the following statement regarding the impact of the DU Update Eligibility message:

“If the only reason the loan is Ineligible is because the LTV is between 80.01% - 85% on an FHA Cash-Out refinance and the FHA Case Number was issued prior to 9/1/19, then the Ineligible Finding on the AUS approval is resolved in compliance with FHA requirements.”

In these situations, in accordance with FHA Handbook 4000.1 II.A.4.iv.(B), the lender may underwrite the mortgage as an Accept and provide an explanation of the resolution of the eligibility in the remarks section of form HUD-92900 LT, FHA Loan Underwriting and Transmittal Summary.

Contacts

Please contact CorrespondentRM@carringtonms.com with any questions.

Carrington thanks you for your business.

Government Agency Approvals

FHA Non-Supervised Mortgagee Approval #:
24751-0000-5
VA Automatic Lender Approval #:
902324-00-00

Mortgagee/Loss Payee Clause

Carrington Mortgage Services LLC
ISAOA/ATIMA
P.O. Box 692408
San Antonio, TX 78269-2408

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This information is provided for your convenience and Carrington Mortgage Services, LLC makes no warranties concerning the accuracy or completeness of any of the information. This is not financial or legal advice and should not be taken as such. This information is for mortgage professionals only and is not intended for distribution to consumers.
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Government Agency Approval | FHA Non-Supervised Mortgage Approval #: 24751-0000-5 | VA Automatic Lender Approval #: 902324-00-00

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