HUD to to Provide Mortgage Bankers Additional Time to Increase Net Worth

The US Department of Housing and Urban Development is planning to give mortgage bankers additional time to adjust their net worth requirements to $2.5 million says National Mortgage News.

During a legislative conference sponsored by the National Association of Mortgage Brokers, Federal Housing Administration assistant Secretary Vicki Bott told attendees HUD is preparing to issue a final rule that will “ensure there is a chance to ramp up to the new requirements.”

Last year, HUD announced it was planning to raise net worth requirements for Mortgagee’s from $250,000 to $2.5 million and planned to give mortgagees a three year phase in period.

Advertisement

Bott cautioned that changes to the final rule are “not substantially” different from what appears in the proposed rule.

In addition to raising net worth requirements, the rule would also eliminate FHA correspondents, putting the responsibility of managing brokers on the reverse mortgage wholesale lenders.

Companies featured in this article:

, ,

Join the Conversation (7)

see all

This is a professional community. Please use discretion when posting a comment.

  • Many correspondents are looking at combining operations so that they can move up to full eagle status. While the market will change, as a market it should be much stronger. Many of us believe that the loss of potentially so many brokers could harm seniors. Hopefully at the same time it will reduce the number of discounters.

  • The elimination of the FHA Correspondent license may actually increase the number of brokers since originating FHA loans will no longer require an FHA license. A Full Eagle license requires much higher fixed operating costs, etc.

  • The elimination of the FHA Correspondent license may actually increase the number of brokers since originating FHA loans will no longer require an FHA license. A Full Eagle license requires much higher fixed operating costs, etc.

  • With or without the elimination of HUD-defined correspondent mortgagee approval, the writing is on the wall: Mortgage brokers are an endangered species. Soon, they will be extinct. We all must adapt or die.

    Many warehouse lenders, as well as some of the investors at the top of the food chain, no longer accept third party-originated (i.e., by brokers) loans. They also are beginning to require increased levels of liquidity as a condition of approval.

    Recent legislative and regulatory changes have placed the broker in a disadvantaged position as compared with direct lenders with regard to RESPA and appraisals. Also, as the cost of doing business is rising at the same time volume is declining, it is difficult to make a strong case for a business model based on discounting the origination fee, which already has been capped by recent legislation.

  • With or without the elimination of HUD-defined correspondent mortgagee approval, the writing is on the wall: Mortgage brokers are an endangered species. Soon, they will be extinct. We all must adapt or die.nnMany warehouse lenders, as well as some of the investors at the top of the food chain, no longer accept third party-originated (i.e., by brokers) loans. They also are beginning to require increased levels of liquidity as a condition of approval. nnRecent legislative and regulatory changes have placed the broker in a disadvantaged position as compared with direct lenders with regard to RESPA and appraisals. Also, as the cost of doing business is rising at the same time volume is declining, it is difficult to make a strong case for a business model based on discounting the origination fee, which already has been capped by recent legislation.

string(117) "https://reversemortgagedaily.com/2010/02/24/hud-to-to-provide-mortgage-bankers-additional-time-to-increase-net-worth/"

Share your opinion