The FHA Quarterly Loan Review Findings Reports include the results of all Single Family Post-Endorsement Technical Loan Reviews (PETRs) conducted by FHA during the subject quarter. The report contains charts which detail FHA’s five main findings categories for PETRs. Each chart lists the top five specific findings in each findings category. The results for each quarter cohort are provided at three points in time.
1. Initial – This is a report of the results of the initial review for all PETRs during the subject quarter. The report contains charts which include the following results for each category and finding:
- The “Overall Loan Sample Characteristics”
- The “% of Total” column, which represents the share of the top five findings within the findings category
- The “% of U” column, which represents a breakdown of the percent of the finding that was unacceptable
2. Refresh – This is a report of the updated results for those loans reviewed during the initial quarter. The refresh analysis is completed approximately 90 days from the end of the subject quarter. Additional information is provided to include:
- The percentage of initial unacceptable findings that were mitigated
- The percentage of findings that remain unacceptable
- The percentage change in unacceptable ratings from the initial report
- The number of indemnifications received for PETRS with an initial review date during the subject quarter
3. Final – This is the final report of the updated results for those loans reviewed during the initial quarter. The final analysis is completed approximately 180 days from the end of the subject quarter. The final analysis includes an update to the additional information provided in the “refresh” report.
FHA uses a three tier rating system: loans are initially rated as “conforming,” “deficient,” or “unacceptable.” A loan rated unacceptable may change if the lender provides mitigating documentation to FHA. Even if a rating is subsequently mitigated, an initial rating of unacceptable indicates the loan exhibited a material defect at the time of endorsement. PETRs are selected by a risk targeting methodology and are not representative of the overall FHA portfolio.
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