The Federal Housing Administration on Thursday said it would pause the mandatory effective date for its electronic appraisal delivery module because it is “reassessing aspects of [its] development and implementation.”
“FHA strongly recommends that industry partners pause EAD onboarding and direct integration activities until final determinations are made regarding the electronic appraisal delivery system for loans originated for FHA insurance endorsement,” FHA said in its industry notification. “This recommendation is only for the FHA Catalyst: Electronic Appraisal Delivery Module and does not impact integration or onboarding activities for any other FHA Catalyst module. FHA will provide further updates on its plans for electronic appraisal delivery as they become available.”
The module was introduced as a pilot in 2020 with no set deadline for lenders to transition. Then, in September of 2021, leaders at the FHA said lenders would have to make the switch to FHA Catalyst by March 14, 2022. The FHA at the time said the module would allow the agency to expand its data collection and analysis capabilities. It would also permit lenders to electronically submit, track and manage single-family property appraisals.
But in February, the agency pushed back the mandatory date to March 14, 2023.
No new date has been announced.
The FHA Catalyst platform has been a bright spot in the Department of Housing and Urban Development’s ancient IT structures.
A HUD Office of Inspector General report published in 2021 said that “to date, FHA Catalyst has been referenced as the most successful effort due to its increased efficiencies and cost savings results.”
The platform will allow the decommissioning of at least 11 outdated legacy HUD IT systems, which will save close to $20 million annually, the IG added.
However, the IG also warned that the success of FHA Catalyst is “dependent upon several factors that pose potential risk,” one of those factors being “the leadership transition [that] has resulted in a shift of focus from continued FHA Catalyst module deployments and improvements to other programs office priorities.”
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