Frequently Asked Questions
Lender Assessment Subsystem (LASS) Release 5.0.0.0 - Appeals Process

Q1. How are lenders notified if they are withdrawn?

A1. Lenders are notified at their address on record via certified mail that their FHA approval has been withdrawn. The lenders status in the LASS inbox also changes to "Withdrawn".

Q2. Why has my FHA approval been withdrawn?

A2. FHA approval is withdrawn for any of the following reasons: 1) Annual recertification fee not received; 2) Annual financial statement audit not received; 3) Failure to respond to deficient or rejected audited financial statements within time set forth in notice of violation; 4) Insufficient response to deficient or rejected audited financial statements within time set forth in notice of violation.

Q3. How can I get my FHA approval reinstated?

A3. Lenders can appeal the withdrawal within thirty (30) days of receipt of the certified letter of withdrawal letter, by either choosing a hearing or reinstatement. Lenders appeal by logging into LASS via the FHA Connection (https://entp.hud.gov/clas/index.cfm). For further guidance, see question 5.

If lenders choose not to appeal, their FHA approval will be terminated once the thirty (30) days from receipt of the certified letter of withdrawal expires. Lenders must wait one (1) year from the date of termination before they are eligible to reapply.

Q4. How many days does a lender get to decide to appeal the withdrawal of their FHA approval?

A4. Lenders have thirty (30) days from the receipt of the certified letter of withdrawal to decide to appeal.

Q5. Where do lenders appeal?

A5. Lenders appeal by logging into LASS via the FHA Connection (https://entp.hud.gov/clas/index.cfm). Click on the "Withdrawn" status in the LASS inbox and the appeals page will display. Read the appeals page to determine if you would like to have a hearing before the mortgagee review board (see question 6) or submit a reinstatement submission (see question 7). Advance to the next page to select either hearing or reinstatement.

Q6. What is a hearing?

A6. Lender can opt to have a hearing in front of the Mortgagee Review Board (MRB) to appeal the withdrawal of their FHA approval. Once the lender submits their request for a hearing, the Office of General Counsel will contact the lender with a date and location for their case to be heard.

Q7. What is reinstatement?

A7. A reinstatement is a submission of the financial statements, or a submission of a cure to a deficient or rejected submission, to HUD, via LASS. Reinstatement submissions are due within fourteen (14) days of choosing to appeal by reinstatement.

Q8. How long after selecting reinstatement does a lender have to complete the process?

A8. Once reinstatement is selected, the lender must submit, via LASS, an acceptable new submission or an acceptable cure to a rejected or deficient submission within fourteen (14) days of choosing to appeal by reinstatement.

Q9. What happens if the reinstatement is not acceptable to HUD?

A9. If HUD does not accept the reinstatement, the lender's FHA approval is terminated. The lender must wait one (1) year from the date of termination before they are eligible to reapply.

Q10. How can I get help responding to a rejected or deficient submission?

A10. Lenders with a rejected or deficient submission should contact their LASS analyst. LASS analysts are identified in the "Reviewer's Name" column in the LASS inbox. Access the LASS inbox by logging into LASS via the FHA Connection https://entp.hud.gov/clas/index.cfm. Contact the LASS analyst by calling HUD at (202) 755-7400. Follow the prompts to connect to the LASS analyst by last name. If you cannot reach the assigned analyst via the voice mail prompts, please call the accounting/auditing helpline at (202) 755-7400 ext. 100 for assistance in connecting to your LASS analyst.

Q11. How do I attach documents to a new, rejected or deficient submission?

A11. All documents attached to a rejected, deficient or new submission must be saved as PDF files in order to be successfully uploaded. Please see the user guide at the LASS website for more information on uploading documents http://www.hud.gov/offices/hsg/sfh/lass/prodlass.cfm.

Q12. How are lenders notified if their reinstatement is accepted by HUD?

A12. Lenders are notified that HUD accepted their reinstatement when the status displayed in their LASS inbox is "Reinstatement Pending". This signifies that the lenders submission has been accepted and the lender must execute the settlement agreement. See question 13. If the status is "Terminated", the lenders submission has not been accepted. Lenders should monitor their status daily by logging into LASS via the FHA Connection https://entp.hud.gov/clas/index.cfm. See question 17 for definitions of each possible status.

Q13. What is required once the lenders reinstatement submission is accepted and the status changes to "Reinstatement Pending"?

A13. Lenders must execute the settlement agreement and pay the reinstatement fee. To execute the settlement agreement, login to LASS via the FHA Connection (https://entp.hud.gov/clas/index.cfm) and click on the status "Reinstatement Pending". The settlement agreement will display. Read the settlement agreement and scroll to the bottom to execute it. Print the settlement agreement to be mailed with the reinstatement fee. Once the settlement agreement has been executed, the status in the LASS inbox will change to "Awaiting Payment". The reinstatement fee must be paid in order to complete the reinstatement process. See question 14. Once HUD receives the reinstatement fee, the lender's FHA approval will be reactivated. The status in the LASS inbox will change to "Reinstated".

Q14. How much is the reinstatement fee and how do I pay it?

A14. The reinstatement fee is $1,000 and should be mailed overnight with the settlement agreement to the Office of Lender Activities and Program Compliance. The reinstatement fee should only be mailed AFTER the submission has been accepted and the status in the LASS inbox is "Awaiting Payment". Please note that if the lender was also withdrawn for not paying the annual recertification fee, the outstanding recertification fee must be added to the reinstatement fee before the lender's FHA approval is reinstated. The OLA address is:

US Department of Housing and Urban Development
490 L'Enfant Plaza East, SW
Suite 3214
Washington, DC 20024.

Q15. How long will it take to be reactivated once HUD receives the reinstatement fee?

A15. Once HUD receives the reinstatement fee, the lender's status will change to "Reinstated" in the LASS inbox. The reactivation takes approximately 24 hours to be effective. However, it may take a few more days before the lender will be able to access CAVIERS. Lenders should contact their Home Ownership Centers if they are experiencing problems.

See the LASS homepage to determine which Homeownership Center covers you: http://www.hud.gov/offices/hsg/sfh/lass/prodlass.cfm

Q16. Please outline the steps again for the reinstatement process.

A16. 1. Lender will receive certified letter of withdrawal from HUD.
2. Lender has thirty (30) days from receipt of letter to appeal via LASS.
3. Lender appeals via LASS. Lender can either choose a hearing or reinstatement.

a) If the lender chooses a hearing, the Office of the General Counsel will contact them with the date of the hearing.
b) If the lender chooses reinstatement, they have fourteen (14) days to submit an acceptable reporting package to HUD.

4. Once the submission is accepted and the lenders status is "Reinstatement Pending", the settlement agreement must be executed and the $1,000 reinstatement fee must be mailed to HUD (plus any outstanding annual recertification fees, if applicable).

Q17. Please define each LASS status in the reinstatement process.

A17.

• "Withdrawn" - This status alerts the lender that they are no longer active as a FHA lender and allows the lender to start the appeals process if they so choose. Action required: Decide whether to appeal within 30 days of withdrawal letter.
• "Reinstatement Review" - This status alerts the lender that their submission is under review at HUD. No action required.
• "Reinstatement Cure Review" - This status alerts the lender that their submission is under review at HUD. No action required.
• "Reinstatement Pending" - This status alerts the lender that HUD has accepted their submission. Action required: Lender needs to execute the settlement agreement. Clicking on the "Reinstatement Pending" status in the LASS inbox accesses the settlement agreement.
• "Awaiting Payment" - This status alerts the lender that the $1,000 reinstatement fee (plus any outstanding annual recertification fees, if applicable) needs to be mailed to the Office of Lender Activities. Action required: Overnight reinstatement fee to HUD.
• "Reinstated" - This status alerts the lender that the reinstatement process is complete and that their FHA approval has been reinstated. No action required.
• "Withdrawal Appeal Pending" - This status alerts the lender that they chose to appeal the withdrawal of their FHA approval through a hearing in front of the Mortgagee Review Board (MRB). No action required. Office of General Counsel will contact lender.
• "Terminated" - This status alerts the lender that HUD has not accepted their appeal and they are no longer a FHA approved lender. No action required. The lender is eligible to reapply after one (1) year from the date of termination.

Q18. How do I contact HUD if I have technical or accounting questions?

A18. Contact the Office of Lender Activities and Program Compliance at (202) 755-7400 ext. 163 for LASS technical assistance; accounting/auditing questions, call (202) 755-7400 ext. 100.

You can also email any technical or accounting questions to LASS@hud.gov.