2.10.2 Chief Underwriters

A. MAP Lenders that are responsible for approving their MAP Underwriters pursuant to this Chapter must designate an employee as a Chief Underwriter who has been approved by COB. As a condition of approval, all new MAP Lenders must have a designated Chief Underwriter who meets this Section’s requirements. . The designated Chief Underwriter will have responsibility for approving MAP Underwriters and Deputy Chief Underwriters and must certify that they are qualified in accordance with MAP Guide requirements. If the Chief Underwriter is absent or is no longer employed by the MAP Lender, and there is no Deputy Chief Underwriter available to perform these functions, the Lender may not submit new applications until COB has approved a new Chief Underwriter to perform them.

B. Ongoing eligibility to approve Underwriters will be determined by COB, by confirming the following: a) the MAP Lender is in good standing; b) the Chief and Deputy Chief Underwriters are in good standing; c) the Chief Underwriter or Deputy has co-signed each application submitted by a designated Underwriter; and, d) the Chief Underwriter confirms in his/her annual Certification that the MAP Lender’s QC Plan and underwriting staff are in compliance as defined herein.

1. The proposed Chief Underwriter must:

   • Be approved in writing by COB.

• Be in good standing with the Department and in full MAP compliance, defined as not having been subjected to MAP disciplinary actions (probation, suspension, or termination) over the previous 5 years.

• Have evidence of 10 years prior underwriting experience, which need not be continuous, but must total 10 years. The experience must include a minimum of 5 years FHA/MAP underwriting experience, with the remaining experience to be comprised of Fannie Mae, Freddie Mac, HFA Risk Sharing or equivalent experience underwriting construction and/or permanent loans on multifamily properties. The proposed Chief Underwriter’s application must include a list of FHA loans the applicant has underwritten and the name(s) of the processing MAP Lender. The applicant may request that 1-year’s equivalent experience be granted for evidence of each 10 acceptably processed Firm Commitment applications, for up to 5 years of the required experience.

• Demonstrate experience in the training, development, and oversight of MAP Underwriter trainees. The application should include specific training experience with a list of all personnel they have trained.

• May not hold a significant equity position in, or be a principal of, the MAP Lender or any of the Lender’s affiliates, although Employee Stock Ownership Plans and similar forms of compensation are permitted.

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2. The roles and responsibilities of Chief Underwriters include:

   • Creation and oversight of the MAP Lender’s training and development program for underwriting personnel.

• Approval of MAP Underwriters.

• Confirmation of the MAP Lender’s compliance with statutory, regulatory and programmatic underwriting processes, requirements and standards.

• Establishment and oversight of the MAP Lender’s quality control process.

• Review, approval and cosigning of all HUD mortgage insurance applications. All application submissions must be cosigned by the Chief Underwriter, who may delegate responsibilities to the Deputy Chief Underwriter, but otherwise remains responsible for the submission.

  • Implementation of COB recommended improvements, including any findings and observations from COB’s review of the MAP Lender or of its loans.

3. MAP Underwriter Approval Process and Certification.

   • The MAP Lender and its Chief Underwriter must provide a certification that the MAP Underwriter or the Underwriter Trainee has complied with all experience and training requirements detailed in this Chapter and must evaluate the prospective Underwriter to ensure the following:

• 1. The Underwriter has completed and complied with the MAP Lender’s approved training plan.
• 2. The Chief Underwriter has extensively reviewed the Underwriter Trainee’s underwriting during the training period to ensure that it complies with MAP requirements and accurately identifies and addresses the risks associated with the proposed loan.
• 3. The Chief Underwriter has reviewed and ensured that the loan documentation submitted to HUD during the training period was complete and that the submission did not require significant revision to correct errors or omissions by HUD staff.

• The MAP Lender and Chief Underwriter must notify COB and certify that the Underwriter or the Underwriter Trainee has satisfactorily completed the designation criteria and has been approved and designated to underwrite loans. The designee is not authorized to begin underwriting until COB is in receipt of and acknowledges the MAP Lender’s notification and certification.

• Although HUD will rely upon the designation and certification by the MAP Lender, HUD reserves the right, with due cause and based on written notification, to deny or rescind such approval and otherwise hold the MAP Chief Underwriter accountable under any of the following circumstances:

• 1. Evidence that the Underwriter Trainee’s work product during the training period was unsatisfactory.
• 2. Prior incidences of poor underwriting that display a lack of knowledge or failure to exercise prudent judgment or risk management.
• 3. Listing of the Underwriter Trainee on HUD’s LDP, suspension or debarment list.
• 4. For other good cause as determined by HUD.

• QC reviews prepared by the MAP Lender must include confirmation that the Chief Underwriter and the Underwriter(s) are approved and have satisfactorily completed all designation criteria,

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including, without limitation, the MAP Lender’s approved training and approval requirements. During the QC process, the reviewer will ensure that each loan reviewed was underwritten by an approved and designated Underwriter, and, if the Underwriter was approved within the previous 4 years, the QC review should include a review of the Underwriter’s approval package.