All,
Maybe this question has been asked (I searched and did not see in my results) but I am second guessing myself. For FHA loans that we utilize DU for AUS engine how should we report the system type & recommendation? They are ran through DU and show a DU & Approve/Eligible result however the fine print says the loan has been underwritten through DU for gov't loans using FHA Total Scorecard.
In essence should I report as DU Approve/Eligible (Option 1, Option 1) or FHA Total Scorecard Accept (Option 3, Option 8)?

I would be interested in hearing others opinions on this as well. We went the route that you would report "3" for AUS System of TOTAL Scorecard and "8" for Accept for AUS Result. We did not run this question by the CFPB. Our decision was based on the information below. I won't sit here and tell you I am 100% confident. I just don't see how you would ever report TOTAL Scorecard if you don't report it in these scenario because as far as I am aware there is no stand alone TOTAL Scorecard AUS system.

Commentary of HMDA Rule:

- In addition, the Bureau recognizes that the Federal Housing Administration’s (FHA) Technology Open to Approved Lenders (TOTAL) Scorecard is different than the automated underwriting systems developed by Fannie Mae and Freddie Mac. TOTAL
Scorecard is a tool developed by HUD that is used by financial institutions to evaluate the creditworthiness of applicants and determine an associated risk level of a loan’s eligibility for insurance by the FHA. Unlike the automated underwriting systems of the GSEs, TOTAL Scorecard works in conjunction with various automated underwriting systems. However, if a financial institution uses TOTAL Scorecard to evaluate an application, the Bureau has determined that the HMDA data’s usefulness will be improved by requiring the financial institution to report that it used that system along with the result generated by that system.

Commentary in Update on 8/24/2017:

- The Bureau declines to clarify further reporting requirements when a financial institution uses TOTAL Scorecard to evaluate an application because that scenario is addressed in the 2015 HMDA Final Rule. The Bureau explained that TOTAL Scorecard works in conjunction with various AUSs, and that if a financial institution uses TOTAL Scorecard to evaluate an application, the Bureau had determined that the HMDA data’s usefulness will be improved by requiring the financial institution to report that it used TOTAL Scorecard along with the result generated by that system.

HMDA FIG February 2018:

- c. Use Codes 8 or 13 for the AUS result returned by FHA TOTAL Scorecard. (this is only Accept and Refer)

If you look at the DU Underwriting Findings, there will be a message for FHA loans that "This loan has been underwritten through DU for government loans using the FHA TOTAL Scorecard."

We report Codes 3 and 8 (or 13) for the AUS and Result on FHA Loans.