September 4, 2015
We’ve been reporting on a series of rule updates, amendments, and modifications to FHA single-family home loan policy scheduled to take effect on September 14, 2015.
The new FHA Single Family Housing Handbook, also known as HUD 4000.1, contains all the rules and requirements for the FHA single family home loan program. The FHA/HUD official site has a Frequently Asked Questions list that addresses questions about a variety of aspects related to HUD 4000.1.
Some of those questions involve FHA policy that pertains to borrowers, some pertain strictly to the lender. For example, lenders may wonder what the FHA policy is with regard to becoming or remaining a participating FHA lender.
The FAQ section addresses that specific issue with a list of guidelines that include the following under a section titled, “What would make the principal, employee, or other mortgagee participant ineligible for FHA approval?” There, we learn the following:
“As part of its application, a corporate officer for the applicant must complete a series of certification statements that address compliance with FHA requirements. A mortgagee shall not have any officer, partner, director, principal, manager, supervisor, loan processor, loan underwriter, or loan originator who is:
–Currently suspended, terminated, debarred, fined, convicted, denied approval, or subject to license revocation or other sanction by a federal, state, or local government agency, or by any other regulatory or oversight entity with jurisdiction including a Limited Denial of Participation (LDP), or other restriction under Part 24 of Title 24 or Part 180 of Title 2 (as implemented by Part 2424 of Title 2) of the CFR or any successor regulations to such parts, or under similar provisions of any other federal or state agency;
–Under indictment for, or convicted of, an offense that reflects adversely upon the applicants integrity, competence or fitness to meet the responsibilities of an approved mortgagee;
–Subject to unresolved findings in a HUD or other government audit, investigation, or review;
–Engaged in business practices that do not conform to generally accepted practices of prudent mortgagees or that demonstrate irresponsibility;
–Convicted of, or who has pled guilty or nolo contendere to a felony related to participation in the real estate or mortgage industry during the 7-years preceding the application date for FHA approval; or any time before the application date, if it involved fraud, dishonesty, breach of trust, or money laundering;
–In violation of the S.A.F.E. Mortgage Licensing Act of 2008 or any applicable State law or its equivalent under state law, including all Nationwide Mortgage Licensing System and Registry requirements.”
That is a fairly extensive list, but it does illustrate how far the FHA and HUD are willing to go to safeguard the FHA loan process. We’ll cover some of the other policy statements due to go into effect on September 15, 2015, in future blog posts.
Borrowers and lenders who need to know more about the new HUD 4000.1 and explore this .pdf available from the FHA official site to learn more.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It’s designed especially for real estate websites–a widget that displays FHA loan limits for the counties serviced by those websites.
It is easy to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today: http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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