A NEW DAY FOR FHA

On April 20, the Department of Housing and Urban Development (HUD) issued a memo outlining its final rules regarding Federal Housing Administration (FHA) risk-management reforms. Among the changes was an increase in the net-worth requirements for FHA-approved lenders over the next three years and th...

Full description

Saved in:
Bibliographic Details
Published in:Mortgage Banking 2010-01, p.12
Main Author: Schroeder, Greg
Format: Article
Language:English
Subjects:
Brokers
Due diligence
Federal regulation
Fraud
Government sponsored enterprises
Lenders
Loan originations
Loans
Public housing
Reforms
Risk management
Wholesalers
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:On April 20, the Department of Housing and Urban Development (HUD) issued a memo outlining its final rules regarding Federal Housing Administration (FHA) risk-management reforms. Among the changes was an increase in the net-worth requirements for FHA-approved lenders over the next three years and the elimination of the FHA mini-Eagle approval program for third-party originators (TPO). By increasing net-worth requirements -- which effectively ensures that only wholesale lenders would be able to underwrite and close FHA-insured loans, and placing the onus on wholesale lenders to approve and monitor their TPO partners for adherence to FHA origination requirements -- FHA is providing lenders greater incentives for holding their brokers and their loans to a higher standard. With the ever-mounting increase in regulatory concerns, lenders wilt need to find ways to absorb these new responsibilities without negatively affecting their firm's overall performance and efficiency.
ISSN:0730-0212
1930-5087