FHA to Use Computerized Loan System

The Federal Housing Administration plans to use a computerized mortgage loan evaluator system developed by Freddie Mac to cut application time for FHA-insured mortgages dramatically. “We can now evaluate an FHA mortgage application in just two minutes--more than 20,000 times faster than before,” said Housing and Urban Development Secretary Andrew Cuomo. Final approval of an FHA-insured loan can be done within a week or two. FHA is part of HUD and provides insurance for mortgage loans to expand homeownership opportunities, particularly among low- and middle-income families. FHA now insures about 750,000 mortgages each year. The new evaluator system, called Loan Prospector, is part of a move toward automation of the mortgage underwriting process. The other big player in the growing field is Fannie Mae, which bundles thousands of home mortgages together and packages them as securities. The computerized system will be available at some FHA-approved lenders immediately.