The Department of Housing and Urban Development (HUD) on Wednesday released a mortgagee letter clarifying self-reporting requirements for single family Federal Housing Administration-approved lenders.
The letter’s requirements, effective immediately, encompass what information must be reported to FHA; timeframes for lenders’ internal reporting to senior management and external reporting to FHA; how reports should be formatted; the FHA’s review process; and repercussions of failing to report to FHA.
Not only are lenders required to report to FHA all findings of fraud and material misrepresentations, but they must also identify what actions, if any, have been taken to attempt to mitigate or resolve each finding and report planned or pending follow-up actions.
Lenders have 30 days to report quality control review findings to senior management following the completion of the initial findings report. Any fraud or material misrepresentations, however, must be reported to FHA immediately.
FHA requires lenders to report findings to FHA using the Neighborhood Watch Early Warning System’s lender reporting feature. Paper reports are not accepted.
Failure to comply with FHA requirements by agency-approved lenders could result in FHA taking administrative action against the lender, the letter warns.
Written by Alyssa Gerace