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USDA Rural Development has recently introduced a new security role of “Lender Agent” to their participating lenders.
This new role will enable lenders to provide Guaranteed Underwriting System (GUS) access to third party agents such as mortgage brokers and/or correspondent lenders. The USDA’s GUS was updated on December 9, 2015 to help facilitate this new functionality.
Once officially designated as a “Lender Agent,” a User may be able to establish applications, order new and re-issue existing credit reports and request preliminary underwriting recommendations on behalf of an approved lender.
Approved lenders, however, will continue to be responsible for uploading documents and requesting final submissions in GUS. It should be noted that “Lender Agent” Users can only be associated with one lender agent organization. However, they can be associated with multiple GUS approved lenders.
The approved lenders will have a view-only capability of applications controlled by an authorized Lender Agent in GUS and the Lender Agent User will have a view-only capability of the application after releasing control to the approved lender. An application cannot be released back to the Lender Agent once the approved lender has been given control.
One age-old complaint heard from lenders participating in USDA’s Rural Development loan programs is that it takes too long to obtain a loan approval and that lenders have not yet been given the authority to underwrite, approve and close USDA loan transactions – similar to Direct Endorsement authority granted to approved lenders by HUD on FHA loan transactions.
In my opinion, this option has been long overdue as FHA and VA have both successfully delegated such responsibilities to approved lenders for many years (Note: FHA’s Direct Endorsement program was first implemented in 1983).
Loading ...One encouraging recent development on Capitol Hill is that the House Financial Services Committee approved a bill on December 8, 2015, that would provide the Rural Housing Service with Direct Endorsement authority for the first time. The Committee approved the legislation (which would also streamline FHA’s certification requirements for condo projects) by a 44-10 vote.
Let’s hope that this legislation ultimately gets enacted and the USDA can offer Direct Endorsement authority to its participating lenders. Thinking “outside the box” – why not consolidate the processing & underwriting of FHA, VA and USDA loan programs into regional “Government Loan Program” processing centers?
This would help streamline government lending operations and bring some economies of scale to the processing of this workload. I guess we will have to wait for the next Administration to take office and start a “Re-invention of the Government” campaign for such a radical proposal to be seriously considered.
Stay tuned!
