At some point in your career − maybe even during a job interview − many in the mortgage lending industry have been asked: Are you a DE underwriter? Do you have a CHUMS number? What is your DE number? Essentially, these are all variations of the same question.
In 1996, HUD/FHA delegated the responsibility of approving underwriters to process loans under the Direct Endorsement (DE) program to approved lenders. Previously, each of HUD’s 81 Field Offices retained that authority. Later in 1996, HUD began the process of consolidating all of its single family loan origination operations from the 81 Field Offices into the current four Homeownership Centers (Philadelphia, Atlanta, Denver and Santa Ana) – with a Headquarters office in Washington D.C.
The need became apparent to HUD that delegating the responsibility to approved lenders of “Registering” underwriters, who met the established education and experience criteria for such a position, was in everyone’s best interest. As a result, each FHA approved lender must now register their underwriters using the Underwriter Registry function in FHA Connection.
If a qualified individual has never before obtained their “Direct Endorsement” (DE) or CHUMS (HUD’s computerized system) number – an FHA approved lender will now register them and obtain their “DE number” for them.
It is important to note that, once this DE number has been assigned to an individual, their number will remain with them their entire career – even if they terminate employment with the Firm that registered them.
The one big drawback to this current system is that an interested and qualified person cannot obtain their “FHA approval” or “DE number” as an underwriter unless they work for an FHA approved lender.
For example, if someone currently works for a Quality Control Firm or a lender that is not FHA approved and has many years of conventional underwriting experience – they would not be able to obtain their “DE or FHA Approval” unless they resigned their position and went to work for an FHA approved lender who then could register them and obtain their DE number for them. In fact, I know several underwriters who changed jobs for this very reason.
Perhaps HUD will modify this policy in the future to allow prospective DE underwriters to obtain their approval directly from one of the four HUD Homeownership Centers? Just a thought!
Stay tuned for my next Blog Post on what steps FHA-approved lenders must take when hiring underwriters or when current underwriting staff resign or are terminated.
For more information on HUD’s DE underwriter qualification criteria – refer to HUD Handbook 4155.2 Section 2.A.3 which can be accessed from the www.fha.gov website.