The Department of Housing and Urban Development published additional guidance that clarifies quality control requirements for servicing transfers and loan sales, reporting of fraud and the required timeframes for mortgagees to review rejected applications.
Starting this year, the Federal Housing Administration will neither approve applications for approval as a loan correspondent, nor monitor lenders acting in such capacity for the purpose of the origination of loans submitted for FHA insurance. FHA approved mortgagees are now responsible for monitoring third parties and the mortgagee letter provides some guidance to establish their quality control plan.
“All FHA-approved mortgagees, including those in sponsored relationships must have a Quality Control Plan that requires the review of loans that are originated or underwritten,” said the ML. “For those mortgagees that have Sponsored Third Party Originators, the Quality Control Plan must require the review of loans originated and sold to the mortgagee by each of its Sponsored Third Party Originators.”
For more information on the requirements, see the Mortgagee Letter below.