NEWSROOM

Question: What is required of a mortgage lender that receives Notice of Return (NOR) notification from FHA?

Answer:

A Notice of Return (NOR) refers to a HUD notification to a Mortgagee specifying the reason a mortgage is not currently eligible for endorsement. HUD issues a NOR electronically through FHA Connection. The NOR will state the reason(s) for non-endorsement and any corrective actions that the Mortgagee must take.

A Mortgagee may request reconsideration for insurance endorsement in response to a NOR. All such requests must be received by HUD within the 60-day endorsement submission period or within 30 days of the issuance of the NOR, whichever is longer. If the Mortgagee submits a request for reconsideration after this time period, the Mortgagee must follow specific guidelines for late submission. See page 390 of the HUD Handbook 4000.1 for additional information of Late Submissions.

If a mortgage is permanently rejected for insurance endorsement, the Mortgagee must notify the borrower that they do not have an FHA-insured Mortgage and include the circumstances that made the mortgage ineligible for FHA insurance. The Mortgagee must obtain a refund of both the upfront mortgage insurance premium and any periodic mortgage insurance premium paid by or on behalf of the borrower and apply the refund to the principal balance of the loan.