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Frequently Asked Questions - LASS Appeals Process

 
Q1: How are lenders notified if they are withdrawn?
A1: Lenders are notified via certified mail that their FHA approval has been withdrawn. The lenders status in LASS will also be "Withdrawn".
Q2: Why has my FHA approval been withdrawn?
A2: FHA approval is withdrawn for any of the following reasons:
  1. Annual recertification fee not received.
  2. Annual financial statement audit not received.
  3. Failure to respond to deficient or rejected audited financial statements.
Q3: How can I get my FHA approval reinstated?
A3: Lenders can appeal the withdrawal by either choosing a hearing or reinstatement. If lenders do not choose to appeal, they must wait one year to reapply to be FHA approved.
Q4: How many days are given to decide to appeal?
A4: Lenders have thirty (30) days from the receipt of the certified letter of withdrawal to appeal their withdrawal by choosing either a hearing or reinstatement.
Q5: Where do lenders appeal?
A5: Lenders appeal by logging into LASS via the FHA Connection. Lenders click on the "Withdrawn" status in the LASS inbox and the appeals page will display. Read the appeal page and scroll to the bottom to select either a hearing or reinstatement.
Q6: What is a hearing?
A6: If a lender feels they were erroneously withdrawn, they can opt to have a hearing in front of the Mortgagee Review Board. Once the lender submits their request for a hearing, the Office of General Counsel will contact the lender with a date and location for their case to be heard.
Q7: What is reinstatement?
A7: Lenders can choose reinstatement if they would like to either respond to a rejected or deficient submission or file their financial statements for the first time.
Q8: How long after selecting reinstatement does a lender have to complete the process?
A8: Once reinstatement is selected, the lender must submit an acceptable cure to a rejected or deficient submission or an acceptable new submission within fourteen (14) days.
Q9: What happens if the cure to the rejected or deficient submission or the new submission is not acceptable to HUD?
A9: Lenders must submit an acceptable cure or financial statement package in order to be reinstated. If the cure or new submission is not accepted by HUD, the lenders FHA approval will be withdrawn and the lender will be terminated from the program. The lender must wait one (1) year before they are eligible to reapply.
Q10: How can I get help responding to a rejected or deficient submission?
A10: Lenders with a rejected or deficient submission should contact their LASS analyst. LASS analysts can be identified in the "Reviewer's Name" column in the LASS inbox. Access the LASS inbox by logging into LASS via the FHA Connection. Contact the LASS analyst by calling HUD at (202) 755-7400. Follow the prompts to connect to the LASS analyst by last name. You can also call the accounting helpline at (202) 755-7400 ext. 100 to be connected to your LASS analyst.
Q11: How do I attach documents to a rejected, deficient or new submission?
A11: Documents attached to a rejected or new submission must be in Rich Text Format in order to be successfully uploaded. Documents attached to deficient submission must be in either Rich Test Format (RTF) or JPG. Please see the user guide at the LASS website (http://www.hud.gov/offices/hsg/sfh/lass/prodlass.cfm) for more information on uploading documents.
Q12: Where can I get help with creating a new submission, accounting issues or technical issues related to LASS?
A12: For accounting questions, please call (202) 755-7400 ext. 100. For technical issues, please call (202) 755-7400 ext. 163. You can also e-mail LASS@hud.gov. Please see user guides for appeals and creating a new submission at the LASS website (http://www.hud.gov/offices/hsg/sfh/lass/prodlass.cfm).
Q13: How are lenders notified if their reinstatement is accepted by HUD?
A13: Lenders should monitor their status in the LASS inbox. When the status is "Reinstatement Pending", the lenders submission has been accepted. If the status is "Terminated", the lenders submission has not been accepted and the lender has been withdrawn. Lenders must wait one year before they are eligible to reapply to be a FHA approved lender.
Q14: What is required once the lenders reinstatement is accepted and the status changes to "Reinstatement Pending" in order to be reinstated?
A14: Lenders must execute the settlement agreement and pay the reinstatement fee. To execute the settlement agreement, login to LASS via the FHA Connection and click on the status "Reinstatement Pending". The settlement agreement will display. Read the settlement agreement and scroll to the bottom to execute it. Once the settlement agreement is executed, the status will change to "Awaiting Payment". The reinstatement fee must be paid in order to complete the reinstatement process.
Q15: How much is the reinstatement fee and how do I pay it?
A15: The reinstatement fee is $1,000 and should be mailed overnight to the Office of Lender Activities only after the submission is accepted. The OLA address is:
  • US Department of Housing and Urban Development
    490 L'Enfant Plaza East, SW
    Suite 3214
    Washington, DC 20024
Q16: How long will it take to be reactivated once the reinstatement fee is received by HUD?
A16: Once the reinstatement fee is received by HUD, the lender will be reactivated and the lenders status will change to "Reinstated" in the LASS inbox. The reactivation takes 24 hours to be effective. However, it may take a few more days before the lender will be able to access CHUMS. Lenders should contact their Home Ownership Centers if they are experiencing problems.
Q17: Please outline the steps again for the reinstatement process.
A17:
  1. Lender will receive certified letter of withdrawal from HUD.
  2. Lender has thirty (30) days from receipt of letter to appeal the withdrawal.
  3. Lender appeals via LASS. Lender can either choose a hearing or reinstatement.
  4. If the lender chooses a hearing, the Office of the General Counsel will contact them with the date of the hearing.
  5. If the lender chooses reinstatement, they have fourteen (14) days to complete the process.
  6. Once the submission is accepted and the lenders status is "Reinstatement Pending", the settlement agreement must be executed and the $1,000 reinstatement fee must be mailed to HUD.
Q18: Please define each LASS status in the reinstatement process.
A18:
  • Withdrawn - This status alerts the lender that they are no longer active as a FHA lender and allows the lender to start the appeals process if they so choose.
  • Reinstatement Review - This status alerts the lender that their submission is under review at HUD. The submission can be under review for a maximum of fourteen (14) days.
  • Reinstatement Pending - This status alerts the lender that their submission has been accepted by HUD and that the lender needs to execute the settlement agreement. The settlement agreement is executed electronically via LASS.
  • Awaiting Payment - This status alerts the lender that the $1,000 reinstatement fee needs to be mailed to the Office of Lender Activities.
  • Reinstated - This status alerts the lender that the reinstatement process is complete and that they are an active FHA lender.
  • Withdrawal Appeal Pending - This status alerts the lender that they chose to appeal the withdrawal of their FHA approval through a hearing.
  • Terminated - This status alerts the lender that their appeal has not been accepted by HUD and they are not longer a FHA approved lender. The lender is eligible to reapply after one year.