this Mortgage Bankers Association (MBA) announced on Tuesday that it will U.S. Department of Housing and Urban Development (HUD), which urged the department to avoid censuring mortgage servicers for violations of the new National Standards for Physical Inspection of Real Estate (NSPIRE) system until the system is “fully accessible and usable by every participant.”
The letter was addressed to Ryan LaFollette, acting deputy assistant secretary for HUD’s Real Estate Appraisal Center (REAC). MBA CEO Bob Broeksmit explained that until the new NSPIRE system is fully accessible and usable by all users, service providers should not be held responsible for any compliance lapses related to the standards.
“service personnel federal housing administration (Federal Housing Administration) loans must be promptly inspected and any deficiencies corrected in accordance with Real Estate Appraisal Center protocols,” Brooksmit said in the letter. “However, accessibility issues and system errors that still need to be addressed in the new NSPIRE system hamper these activities.”
Broeksmit said NSPIRE is due to be implemented by REAC in October 2023, but the MBA has received reports from service staff explaining the challenges they have encountered while trying to use it.
“[S]Maintenance personnel were having difficulty logging into the system, scheduling inspections, maintaining inspection schedules and reviewing reports,” he explained. “Software issues and incorrect data prevented many service providers from accessing the system. Many service personnel were unable to access reports for completed inspections and were unable to follow up on any potentially necessary repairs.
Despite the barriers to accessing NSPIRE, service agencies expressed concerns to MBA about liability for compliance lapses, the letter states.
“MBA urges HUD to provide written assurance to the FHA loan servicing community that they will not be held responsible for NSPIRE requirements until the system is fully operational and available to every participant,” the letter states. “Servicers are using their best efforts. New systems, but NSPIRE issues must be addressed to enable service providers to comply with its requirements. We urge you to make this clear through an official notification or memorandum.
Summary of the history of the agreement inspection teamREAC, a provider of inspection services to public housing agencies and affordable housing management companies, was founded in the late 1990s as the first standardized process for federally subsidized property inspections.
Clearer guidelines and training programs for property inspectors emerged in the early 2000s, and over the next decade inspectors often employed other techniques to accomplish their tasks.
In 2020, REAC launched NSPIRE as a pilot program designed to address known challenges in the inspection process. The final rule, released in May 2023, will require inspectors to use the NSPIRE protocol.
