The mortgagee will be denied approval for Unconditional Direct Endorsement (DE) authority if, at any time during the test case phase, FHA determines that the mortgagee’s submissions demonstrate a lack of knowledge of FHA requirements, or if FHA identifies unacceptable practices.
FHA will provide the mortgagee with written notice of a denial of Unconditional DE authority that specifies the reason for the denial.
The mortgagee may appeal this denial by requesting an informal conference. The appeal must be submitted in writing to the Homeownership Center (HOC) that processed the test cases. The HOC must receive the appeal within 30 days of the date of the notice of denial.
FHA will conduct an informal conference with the mortgagee and its counsel, if any, no later than 60 days from the date of the denial.
Following the informal conference, FHA will issue a determination in writing stating whether Unconditional DE authority is approved or denied.
The mortgagee may appeal a denial following the informal conference by submitting a written request to the Deputy Assistant Secretary (DAS) for Single Family Housing, or his or her designee, within 30 days of the date of the denial determination.
The mortgagee is not entitled to any meeting or informal conference with the DAS or the designee and will be notified in writing of the decision of the DAS or the designee. The decision of the DAS or the designee constitutes final agency action.
Any mortgagee who is denied Unconditional DE authority will not be permitted to reapply until it has:
- demonstrated appropriate remedial education or action;
- supplied evidence to support such action; and
- waited a minimum of 180 days from the date of final agency action.
Handbook 4000.1 I.A.1 is available at http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh.