FHA Turns To Lenders To Check Brokers
The Federal Housing Administration (FHA) is seeking more support from lenders to monitor mortgage brokers, The Wall Street Journal reports. It is planning changes, which will put more responsibility on lenders to ensure there is no fraud or faulty underwriting in the loans they fund and less on the FHA.
As part of the amendments, to be effective from May 20, the FHA will stop certifying mortgage brokers or tracking the individual performance of loans that they originate. It will instead call for lenders to sponsor brokers and to assume responsibility for those loans, including losses from fraud or poorly underwritten loans.