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HUD proposes new regulations on lenders for reimbursement

The U.S. Department of Housing and Urban Development (HUD) recently proposed new regulations to strengthen its authority to force certain lenders to indemnify or reimburse the Federal Housing Administration (FHA) for insurance claims paid on mortgages that are found not to meet the agency's guidelines.  Additionally, HUD's proposed rule would require all new and existing lenders with the ability to insure mortgages on HUD's behalf to meet stricter performance standards to gain and maintain their approval status.

For those lenders with special authority to insure mortgage loans on FHA's behalf, HUD seeks to force indemnification for 'serious and material' violations of FHA origination requirements such that the mortgage never should have been endorsed by the mortgagee in the first place just as FHA would not have insured the mortgage on its own.

Reprinted From C.A.R.

Posted by Adam Mallory on October 18th, 2010 9:10 AMPost a Comment (0)

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