Visit our website to view our updated blog

To keep all of our information in an easy-to-find, central location for you, we are now updating our blog only through our website. You can find all of our monthly newsletters, webinar Q&A, etc., on the blog on our website:

http://www.mortgagecomplianceadvisors.com/index.php/blog.

HUD Press Release: FHA Announces Policy Changes to Address Risk and Strengthen Finances

Hud posted a press release this morning, announcing more policy changes. These changes are aimed at strengthening FHA's capital reserves while working to reduce risk. The announced FHA policy changes include:

1. Increased mortgage insurance premium (MIP)
2. Updated FICO scores and down payments
3. Reduced allowable seller concessions from 6% to 3%
4. Increased enforcement on FHA lenders

Read all the details in HUD's press release.

With all the recent regulation changes, it can be frustrating trying to keep up. We are happy to answer your questions. Visit www.MortgageComplianceAdvisors.com or call 877-226-3152.

MCA Monthly Update - January 2010

Find underwriting & processing tips and compliance updates in our January newsletter, including useful links and resources for the new RESPA Rule.

Get the latest regulation news from our new website

Check out our newly redesigned website to find upcoming regulation deadlines, the latest compliance news, and other helpful resources.

Our new website is designed to be a helpful central location where you can find an abundance of frequently updated information for regulations from FHA, Fannie Mae, Freddie Mac, VA, the FTC, etc. Each deadline or resource is linked to the official regulation or form, so that you can read the exact wording.

Regulations continue to change, but Mortgage Compliance Advisors will help you comply.

From FHA Commissioner

We found something interesting from HUD today and thought it might be helpful to you lenders. HUD posted a letter today from FHA Commissioner David H. Stevens with questions and answers for various topics, such as new FHA policies, reasoning behind changes to the FHA approval process, the new RESPA rule taking effect on January 1, 2010, etc. Read the whole letter here.

MCA Monthly Update - December 2009

Read our December newsletter, with tips for underwriting and processing, as well as compliance updates for FHA, Fannie Mae, and Freddie Mac.

Quality Control Guidelines Summarized for Fannie Mae, Freddie Mac, and FHA

Many investors and agencies, such as Fannie Mae, Freddie Mac, and FHA, require its lenders to have an active quality control plan in place. We wanted to help make the regulations more understandable for you, so we published an article summarizing basic quality control guidelines for Fannie Mae, Freddie Mac, and FHA. We hope you find the information useful — and we are always happy to answer your questions.

Read the full article summarizing QC guidelines for Fannie Mae, Freddi Mac, and FHA.

MCA Monthly Update - November 2009

MCA Monthly Update November 2009

Welcome to the MCA Monthly Update. To help you stay compliant and up-to-date, our newsletters contain underwriting tips, processing tips, and compliance updates. We hope that you find the content informative and useful. As always, your feedback is appreciated. If you have any questions, simply reply to this email or call us at 877-226-3216. For real time compliance news, you can now follow us on Twitter and Facebook. Update: The FTC recently extended the enforcement date for the Red Flags Rule to June 1, 2010.* Implement your Red Flag Policy to comply. *(See http://www.ftc.gov/opa/2009/10/redflags.shtm.)

Underwriting & Processing Tips

Based on some common findings from quality control audits, we have compiled a list of four tips from the month of October. 1. If the final TIL APR varies from the intial TIL by more than .125%, it must be redisclosed (as of July 30, 2009). 2. One of our most common problems is the duplication of documents throughout the file, which can make the file much larger than it should be. Please make sure to review your files to prevent excessive duplication. 3. The underwriting approval is required in your package. Make sure to retain and include a copy of the underwriting decision in your file. 4. For quality control audits, be sure to include only final AUS findings in the file.

FHA Update

ML 09-38: Update on Eligibility Requirements for Nonprofit Instrumentalities (115 Waiver). - "Expand[s] eligibility requirements for nonprofit instrumentalities of government to include entities the income of which is excluded from Federal taxation under § 115 of the Internal Revenue Code of 1986 (IRC). - [They can be approved] for placement on the FHA Nonprofit Organization Roster (Roster) and ...participate in single-family housing programs as providers of secondary financing." (View the entire letter.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ML 09-39: Updated Claim Filing and Delinquency/Default Reporting Requirements For FHA's Making Home Affordable Modification Program (FHA-HAMP). - "Updated claim filing and delinquency/default reporting requirements for the FHA Home Affordable Modification Program (FHA-HAMP). - Mortgagees must begin reporting the updated status codes beginning with the January 2010 reporting cycle." (View the entire letter.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ML 09-40: Policy and Procedures on Multifamily Mortgage Insurance Applications Involving Master Lease Structuring to facilitate the use of Tax Credits. - "Represents the Department's final policy and procedures for Master Lease applications... - A Master Lease, also known as a Sandwich Lease or Credit Pass Through, is used by developers of multifamily projects to maximize the realization of tax credit equity and distribute benefits among various investors." (View the entire letter.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ML 09-41: Appraisal performance standards and sanctions. - "Reminds mortgagees and appraisers of [FHA] appraisal performance standards... and FHA enforcement standards and sanctions that can be imposed by the Department upon appraisers who do not comply." (View the entire letter.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ML 09-42: Sub-Servicing of FHA-insured Mortgages. - "To meet the increased need for loss mitigation, the Department has no objection to mortgagees entering into subservicing agreements with other FHA-approved servicers to perform loss mitigation functions." (View the entire letter.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ML 09-43: HOPE for Homeowners Program - Comprehensive Guidance. "Key changes to the HOPE for Homeowners (H4H) Program: - Borrowers are ineligible if their net worth exceeds one million dollars, - Borrowers must not have defaulted on any substantial debt in the last 5 years, - The age of appraisal now follows standard FHA guidance, - Reduced mortgage insurance premiums, - Revised loan-to-value and debt-to-income ratios, - Maximum loan-to-value excludes the Upfront Mortgage Insurance Premium, - Eliminated requirement for obtaining most recent two year tax returns, - Eliminated special lender and underwriter certification, - Exit Premium replaces Shared Equity, - Shared Appreciation feature eliminated, - New note and mortgage replaces previous shared equity and shared appreciation notes and mortgages, and - Lenders must submit 5 test cases for pre-closing review by FHA." (View the entire letter.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ML 09-44: Home Equity Conversion Mortgage (HECM) Program -- Clarification of Debenture Interest Calculation for HECM Claim Type 21; Claim Filing Instructions for HECM Claim Types 21 and 24. "Items addressed in this Mortgagee Letter: - Clarification of the term "due date" as it relates to HECM Claim Type 21. - Identification of the additional information that must be provided for Claim Type 21, to ensure the proper calculation of debenture interest. (View the entire letter.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ML 09-45: Introduction of HUD's Web-Based Training Application: Electronic Class (EClass) on Loss Mitigation and Servicing System. - Announces that HUD's on-line, web-based training application, EClass, is now available. It will provide additional training on FHA's Loss Mitigation Programs, including FHA-HAMP, and other industry questions. - The web-based application may be accessed at the following address: https://eclass.hud-nsctraining.com. (View the entire letter.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - To view all HUD Mortgagee Letters for the year, visit the official website. *We offer FHA, VA, and HECM reference manuals with regulations and policies updated quarterly. For more information, visit our website or call 877-226-3216.

Fannie Mae Update

Update, dated 10/6/09: Mortgage Loan Data Requirements - "Effective date for the requirement to deliver the loan origination identifiers and appraiser data elements has been extended to July 1, 2010. - For mortgage loan applications taken on or after July 1, 2010, Fannie Mae will require the use of the updated Form 1003." (View the entire notice.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Announcement 09-30: Retirement of the HomeSaver Forbearance™ and Conversion to the Payment Reduction Plan™. - "Payment Reduction Plan™ (PRP) will replace the HomeSaver Forbearance™ (HSF) program. - The purpose of a PRP is to provide a borrower with temporary payment relief while the servicer and the borrower work together to find the appropriate permanent foreclosure prevention solution." (View the entire announcement.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Announcement 09-31: Updates and Clarifications to the Home Affordable Modification Program. Contains updates and clarifications to the following topics: - Updates to Standard HAMP Documents - Changes to Eligibility Determination Based on Net Present Value Evaluation - Principal Forbearance Thresholds - Verifying Borrower Income and Occupancy Status - Modification Process - Reporting - Clarification of Reimbursement of Administrative Costs (View the entire announcement.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Announcement 09-32: Selling Guide Update - October 2009. - Announces the release of the first update to the April 2009 Selling Guide, which will replace the April 2009 Selling Guide. (View the entire announcement.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Selling Notice, dated 11/4/09: Electronic Appraisal Delivery Update. - Announces deadline change from March 1, 2010 to July 1, 2010 for requirement to submit electronic appraisal reports in an acceptable XML format. (View the entire notice.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Announcement 09-33: New Deed-for-Lease Program. - Introduces Deed-for-Lease Program (D4L), designed to minimize bad effects caused by vandalism and theft to vacant homes. - "D4L allows qualifying borrowers of properties transferred through deed-in-lieu of foreclosure (DIL) to remain in their home and community by executing a lease of up to 12 months in conjunction with a DIL." (View the entire announcement.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - To view all Fannie Mae Announcements and Letters for the year, visit Fannie Mae's website.

Freddie Mac Update

Bulletin 2009-24: Credit and Property Eligibility. - Revises certain credit and property eligibility requirements, including changes to requirements for Freddie Mac-owned streamlined refinance mortgages and Freddie Mac Relief Refinance Mortgages. - Also announces that certain higher-risk mortgages will no longer be eligible for purchase. (View the entire bulletin.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Bulletin 2009-25: Multiple Subjects. - Makes multiple changes to selling and servicing requirements, such as document custodial operations, uniform instruments, attorney fees and title expenses, etc. (View the entire bulletin.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Bulletin 2009-26: Home Affordable Modification Program. - Reminds of changes to HAMP made in Supplemental Directive 09-07. - Revises partial principal forbearance and NPV requirements - Reminds of new HAMP tool available soon - Imminent Default Indicator (IDI) - Reminds that Data Collector is being retired and replaced with the new HAMP Reporting Tool (View the entire bulletin.) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - To view Freddie Mac news, visit Freddie Mac's website.

Fun FTC Halloween Message

The Federal Trade Commission published a fun Halloween-themed list of 12 tips to protect you, your kids, and your computer when online. For example, one of the tips is, "Garlic? Stake through the heart? OnGuardOnline.gov says only the latest security software protects you from online vampires."

Read all 12 Halloween online security tips at:

www.ftc.gov/opa/2009/10/halloween.shtm

MCA Monthly Update - October 2009

Welcome to the MCA Monthly Update. To help you stay compliant and up-to-date, our newsletters contain underwriting tips, processing tips, and compliance updates. For this month’s newsletter, our focus is on compliance updates because HUD has came out with several announcements since our last newsletter. We hope that you find the content informative and useful. As always, your feedback is appreciated. If you have any questions, simply reply to this email or call us at 877-226-3216.

For real time compliance news, you can now follow us on Twitter and Facebook.


Reminder: 3rd Quarter ended September 30. Remember to get your quality control file audits done for FHA, Fannie Mae, Freddie Mac, etc.


EFFECTS OF HUD’S ANNOUNCEMENT FROM SEPTEMBER 18, 2009

HUD announced several changes on September 18. These changes affect FHA lenders and loans, including the FHA approval process for brokers. Visit our blog to read how HUD’s announcement affects sponsors and brokers.


FHA UPDATE: NEW MORTGAGEE LETTERS

• Multifamily Housing Accelerated Processing Guide: Chapter 9, Environmental Review: Letter 09-27

- Announces the release of a revised and updated Multifamily Housing Accelerated Processing Guide, Chapter 9, with new environmental requirements. (View the entire letter.)


• Appraiser Independence: Letter 09-28

Announces New Requirements, effective January 1, 2010:

- Prohibition of mortgage brokers and commission based lender staff from the appraisal process
- Appraiser selection in FHA Connection must be the appraiser who actually performs the appraisal
- Clarifies and expands their policy regarding Appraisal and Appraisal Management Companies’ (AMC) third party origination fees

Re-affirms Existing Requirements:

- Prevention of Improper Influences on Appraisers
- Appraiser Independence Safeguards
- Mortgagees are reminded that they are they are responsible (along with the appraiser) for the integrity, quality, and thoroughness of the appraisal. (View the entire letter.)


• Appraiser Portability: Letter 09-29

- Addresses the portability of appraisals when a borrower switches the lender during loan processing-- effective for all case numbers assigned on or after January 1, 2010.

- “Appraiser shopping” is prohibited. In this case, the first lender must, at the borrower’s request, transfer the case to the second lender. FHA does not require that the appraisal be changed to reflect the new lender, but FHA Connection must reflect the correct lender. (View the entire letter.)


• Appraiser Validity Periods: Letter 09-30

- Announces a change to the validity period for appraisals--reduced from 12 months for proposed construction and 6 months for existing construction to 4 months (120 days) for all appraisals. Effective for all case numbers assigned on or after January 1, 2010. (View the entire letter.)


• Strengthening Counterparty Risk Management: Letter 09-31

Provides notice of several FHA program changes as a result of the enactment of the “Helping Families Save Their Homes Act of 2009” (the HFSH Act):

- It provides limitations on those eligible for the program. Ineligible participants are identified as currently suspended, debarred, under a LDP, under indictment, subject to unresolved findings in a HUD or other government audit, investigation, or review, etc. It is important that you read these specifications in depth.

- Change of lender’s fiscal year end date must be reported to HUD 90 days before change.

- Effective January 1, 2010, all supervised mortgagees (banks and credit unions) must now submit an annual audited financial statement within 90 days of their fiscal year end.

- Mortgagees must use their name as registered with HUD in all advertising and promotional materials related to FHA. Lenders must retain a copy of all advertising for two years.

- Approved lenders are required to notify FHA if individual employees are subject to any sanction or any other administrative action, or if there is a revocation of a State-issued mortgage origination license.

- The HFSH Act expands FHA’s ability to seek civil money penalties against any owners, officers, or directors, for violations of program requirements. (View the entire letter.)


• Revised Streamline Refinance Transactions: Letter 09-32

Announces revised procedures and re-affirms existing procedures regarding Streamline Refinance transactions, to be effective in 60 days or November 18, 2009.

Key Revisions:

- Seasoning set at 6 months

- Minimum payment history standards established

- Net tangible benefit for the borrower at a 5% lower payment with additional provisions pertaining to changing from fixed rate to ARM, and ARM to fixed rate. Investors and second home borrowers are prohibited from refinancing to an ARM.

- Transactions that include a reduction in mortgage term must now be processed and closed as a rate/term refinance.

- If subordinate financing is in place, the maximum combined loan-to-value is set at 125% with or without an appraisal. If there is no new appraisal, the CLTV is based on the original appraisal.

- New maximum mortgage amount for streamline refinances without an appraisal cannot exceed the outstanding principal balance, minus any applicable UFMIP plus the new UFMIP that will be charged on the refinance. A streamline with an appraisal is the lower of outstanding principal balance or 97.75% of the appraised value plus the new UFMIP. Discount points may not be included in the new mortgage.

- If borrower agrees to pay the discount in cash, the lender must verify the availability of funds.

- Certification that borrower is employed and has income.

- If credit score(s) is/are available, the lender must enter the credit score(s) into FHA Connection.

- Lenders should not use TOTAL on streamline refinance transactions. If a lender uses TOTAL, that loan must be underwritten and closed as a rate and term (no cash-out) refinance transaction.

- Mortgagees may no longer use an abbreviated version of the Uniform Residential Loan Application (URLA). The completed application must be dated and signed prior to underwriting of the loan. (View the entire letter.)

- It is our opinion at MCA that FHA is moving toward changing the streamlined rate reduction refinances as we have known them to correspond with other refinance transactions.


• Annual Base City High Cost Percentage Revisions effective January 1, 2009: Letter 09-33

- Announces the annual base city high cost percentage revisions for multi-family mortgages. (View the entire letter.)


• Home Equity Conversion Mortgage (HECM) – Principal Limit Factors: Letter 09-34

- Announces a change in calculating the maximum HECM loans, effective October 1, 2009. The new factors to be used result in a 10% reduced maximum loan. (View the entire letter.)


• Loan Modification: Letter 09-35

- Mandates that the interest rate on loan modifications be reduced to not more than 50 basis points above the FHA and FHLMC current weekly primary rounded to the nearest .125%, as of date of modification. The modified loan amount is then amortized over a 30-year period. (View the entire letter.)


• Revised Eligibility: Letter 09-36

- Reminds appraisers and lenders that as of October 1, 2009, appraisers listed on FHA’s Appraisal Roster who are not state certified will be removed from the roster. (View the entire letter.)


• Flood Zone Requirements and Responsibilities of FHA Mortgagees and Appraisers: Letter 09-37

- Reminds mortgagees and FHA Roster appraisers of their “responsibility to determine if a property is located within a Special Flood Hazard Area…[and reiterates FHA’s] eligibility requirements for properties located in such zones.” (View the entire letter.)


To view all HUD Mortgagee Letters for the year, visit the official website http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/index.cfm.

*We offer FHA, VA, and HECM reference manuals with regulations and policies updated quarterly. For more information, visit our website or call 877-226-3216.


FANNIE MAE UPDATE

• Notice: Refi Plus – Update: MBA Delivery Date for Loans with LTVs above 105 Percent, dated 9/4/09

- “The effective date for MBS delivery of Refi Plus loans with LTVs above 105 percent under the CQ prefix…[is] October 1, 2009.” (View the entire announcement.)


• Energy Loan Tax Assessment Programs: Lender Letter 07-2009

- “This Lender Letter is intended to alert lenders to issues concerning ELTAPs [Energy Loan Tax Assessment Programs] in the underwriting and servicing of Fannie Mae mortgages. …Typically, homeowners repay ELTAP loans via their property tax bill, and in the event of non-payment, the ELTAPs have priority over Fannie Mae’s mortgage lien.” (View the entire announcement.)


• Updates to Minimum Credit Scores, Mortgage Insurance, Pricing for Certain Desktop Underwriter Loans, Biweekly Loans, and Special Feature Codes: Announcement 09-29

“Following is a brief summary of the changes:

- Changes to minimum credit score requirements;
- A number of changes to mortgage insurance coverage requirements, including a new minimum level of coverage and corresponding loan-level price adjustment (LLPA), retirement of Lower-Cost and Reduced MI options, and changes to financed mortgage insurance;
- Changes to pricing for Flexible mortgages and improved pricing for Expanded Approval® (EA) recommendations, and changes to EA special feature codes (SFC);
- Retirement of biweekly mortgage loans; and
- Changes to SFC requirements for MyCommunityMortgage® (MCM®) and other transactions.” (View the entire announcement.)


To view all Fannie Mae Announcements and Letters for the year, visit https://www.efanniemae.com/sf/guides/ssg/2009annlenltr.jsp.


FREDDIE MAC UPDATE

• Home Affordable Modification Program: Bulletin 2009-23

“Makes the following changes to the Home Affordable Modification Program (HAMP) requirements:

- Evaluate and process Mortgages for HAMP in Workout Prospector [effective November 1, 2009]
- Use the property value provided in Workout Prospector
- Collection and reporting of Government Monitoring Data
- Incorporating requirements for first-lien Servicers
- Revising our program activity reporting requirements
- Recordation of the Modification Agreement
- Capitalization and reimbursement of property inspection fees
- Permits Servicers to utilize temporary waivers” (View the entire bulletin.)


• September 25 Bulletin 2009-18 Single-Family Advisory E-mail

- Freddie Mac announced a one month extension for effective dates for underwriting requirements published in the July 10 Single-Family Seller/Servicer Guide (Guide) Bulletin 2009-18 (which “revised…underwriting requirements with respect to borrower income, capacity, assets, and required documentation.”)

- The changes “will now be effective for all mortgages with application dates on or after November 1, 2009, and Freddie Mac settlement dates on or after February 1, 2010.” (View the entire announcement.)


To view Freddie Mac news, visit http://www.freddiemac.com/singlefamily/.


Click to subscribe to the monthly newsletter.

The Effects of HUD's Announcement from September 18, 2009

On September 18, 2009, HUD published a press release announcing numerous changes that are either proposed or already implemented, which affect FHA lenders and FHA loans. The most sweeping proposed change is that HUD/FHA will approve only Sponsor (investor, full eagle) lenders. FHA will then have the Sponsors approve the FHA brokers with whom they are willing to do business. Within one year, HUD intends to require an increase in the Sponsor’s net worth of $1,000,000 (increased from the present $250,000).

While the final rules are not yet in effect, it appears they will be implemented after a “notice and comment period.” Although these changes raise many questions which will require upcoming information from HUD/FHA, the following reflects our views on how this will affect lenders and brokers.

It is clear from the language of the press release that HUD is trying to make it easier for brokers to do FHA business, while at the same time putting more responsibility and accountability on both the broker and the Sponsor to make justified loans. HUD stated in the press release that “these lenders must have skin in the game,” which seems a clear indication that brokers and Sponsors will be held more accountable for loans produced than in the past.

Given the apparent intent of this new rule, it seems that the Sponsor will now be responsible to see that brokers are in compliance with the Quality Control expected by FHA, and presumably desired by the Sponsor. These Quality Control programs help ensure loans that comply with all regulations and laws, as well as minimize losses from bad loans. It is likely that even though the net worth requirements for brokers will be reduced or eliminated, Sponsors will continue to require Quality Control Plans and Quality Control audits in order to do business with them.

As HUD/FHA comes out with further announcements, we will keep you updated through our newsletter and social networks. Visit HUD's website to read the entire press release from September 18, 2009.


Keeping up with changing regulations can be a daunting task. Mortgage Compliance Advisors offers lending manuals for FHA, VA, and HECM that are easy to use and updated quarterly. For more information, visit www.MortgageComplianceAdvisors.com or call 877-226-3152.

Summary of FHA's guidelines for quality control plans

If you're just starting out with FHA or you'd like to know FHA's guidelines for quality control plans, check out our article summarizing FHA's requirements for QC plans.

MCA Monthly Update - September 2009

Welcome to the MCA Monthly Update. To help you stay compliant and up-to-date, each newsletter we send contains underwriting tips, processing tips, and compliance updates. We hope that you find the content informative and useful. As always, your feedback is appreciated. If you have any questions, simply reply to this email or call us at 877-226-3216.

Additionally, for real time compliance news, you can now follow us on Twitter and Facebook.


UNDERWRITING & PROCESSING TIPS

Based on some common findings from quality control audits, we have compiled a list of three tips from the month of August.

1. We are seeing TIL Disclosures on FHA loan files with conventional parameters. Remember on the initial TIL disclosure, the FHA late fee is 4% (not 5%) and the loan is assumable with conditions.

2. The Servicing Disclosure dated January 16, 2009, is now mandatory--any older version is unacceptable. Make sure it is properly completed with appropriate boxes checked.

3. We continually have problems determining compliance with the advance disclosures for TIL and RESPA. Remember, if the application and all disclosures are not completed in a face-to-face interview with signatures, use a date stamp showing “documents mailed to applicant(s) on September 3, 2009.” The date stamp should be on both the original as mailed and the file copy. When the original is returned by the applicant, the processor should remove the file copies to eliminate duplicate copies in the file.

FHA UPDATE

• Electronic Annual Certification to Replace Title II Yearly Verification Report: Letter 09-25. “Effective September 1, 2009, all program participants seeking renewal as an FHA-approved mortgagee must complete the electronic Annual Certification as a component of the renewal process [which replaces the paper Yearly Verification Report].” (View the entire letter.)

• Eligibility of Projects for Mortgage Insurance where Construction has Started: Letter 09-26.. This letter “temporarily authorizes and establishes policy for Section 220, 221(d) and 231 mortgage insurance programs for multi-family proposals that were unable to complete construction due to a loss of funding..” (View the entire letter.)

To view all HUD Mortgagee Letters for the year, visit the official website http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/index.cfm.

For information about our FHA, VA, or HECM reference manuals with regulations and policies updated quarterly, visit our website.


FANNIE MAE UPDATE

• Retirement of HomeStyle® Construction-to-Permanent: Announcement 09-28.. “Fannie Mae will be retiring the HomeStyle Construction-to-Permanent mortgage product… Effective immediately, lender applications for HomeStyle Construction-to-Permanent approval will no longer be accepted. Closed HomeStyle Construction-to-Permanent loans must be purchased by Fannie Mae from existing approved lenders by November 30, 2009.” (View the entire announcement.)

• Reminder: From Announcement 09-19, dated June 8, 2009: “Form 4506-T Lender Tips.”. On or after September 1, 2009, “Fannie Mae’s updated policy regarding use of IRS Form 4506-T to validate borrower income documentation (Announcement 09-19) requires the lender to:

- have all borrowers (regardless of income source) complete and sign Form 4506-T at both application and closing

- add the execution of Form 4506-T with the IRS (directly or through an authorized vendor) to their written quality control (QC) plan (refer to the Selling Guide, Subpart D1, Lender QC Process, for details about lender QC requirements)” (View the entire announcement.) If you need help complying with this rule, give us a call.

To view all Fannie Mae Announcements and Letters for the year, visit https://www.efanniemae.com/sf/guides/ssg/2009annlenltr.jsp?referrer=frpromo.


FREDDIE MAC UPDATE

• Single-Family Seller/Servicer Guide: Bulletin 2009-22.. This bulletin makes several changes to selling requirements, including guidance regarding area median income changes, amending appraisal requirements for super conforming mortgages, and updates for several forms and exhibits. (View the entire bulletin.)

• Off-cycle Update to Exclusionary List: Industry Letter dated August 21, 2009.. The Freddie Mac Exclusionary List has been updated and may now be accessed via the Freddie Mac Selling System, MIDANET, MultiSuite, and Loan Prospector.

“As a reminder…Seller/Servicers [are required] to represent and warrant that they have not employed and will not employ any person listed on the Freddie Mac Exclusionary List as a Principal in connection with any Mortgage sold to Freddie Mac or in connection with any function related to such a sale.” (View the entire industry letter.)

To view Freddie Mac news, visit http://www.freddiemac.com/singlefamily/.

Mortgage Compliance Advisors is now on Twitter and Facebook

The mortgage industry and regulations are constantly changing, but you can now receive helpful, real-time updates by following MCA on Twitter. In addition to our monthly newsletters with compliance news, these Twitter updates will help keep you informed right as the news comes out. Get mortgage compliance updates on Twitter or become a fan of Mortgage Compliance Advisors on Facebook.

New Lending Manuals a Good Reference for FHA, VA, and HECM

We're excited to announce the launch of lending manuals for FHA, VA, and HECM. We all know that new regulations just keep coming out for the mortgage industry, and it can get overwhelming trying to keep up with them all. Luckily, we have some very experienced and helpful people here at MCA, who have written easy to understand, complete guides for FHA, VA, and HECM. These manuals are updated quarterly, so you don't have to worry about falling far behind in the regulations. We also included links to the actual regulations, in case you want to see HUD's exact wording. And of course if you have any additional mortgage questions, you are always welcome to call in and ask. Trying to keep up with all the regulations and paperwork can be stressful, but we hope these lending manuals will save you some time and hassle.

We actually published a press release about this announcement. Just click this link to read the full article. Or, if you'd like to request more information about the manuals, just give us a call at 877-226-3252 or visit our web page for the FHA Lending Guide.

MCA Monthly Update - August 2009

Welcome to the MCA Monthly Update. To help you stay compliant and up-to-date, each newsletter we send contains underwriting tips, processing tips, and compliance updates. Since there have been multiple recent regulation changes, this month’s newsletter focuses on compliance updates. Beginning with the next newsletter, in addition to the FHA update, we will be adding update sections for Fannie Mae and Freddie Mac. We hope that you find the content informative and useful. As always, your feedback is appreciated. If you have any questions, simply reply to this email or call us at 877-226-3216.

REGULATION Z REVISIONS IN EFFECT JULY 30, 2009

On July 30, the new Regulation Z changes for the Truth in Lending Act (TIL) became effective. As part of Regulation Z, the Mortgage Disclosure Improvement Act (MDIA) revised TIL requirements surrounding early and final disclosures to homebuyers, as well as discussing when fees are allowed to be collected. (Read the Federal Reserve Board’s press release at www.federalreserve.gov/newsevents/press/bcreg/20090508a.htm.)

A Few Highlights:
- Creditors must “give good faith estimates of mortgage loan costs (‘early disclosures’) within three business days after receiving a consumer's application for a mortgage loan and before any fees are collected from the consumer, other than a reasonable fee for obtaining the consumer's credit history.
- Creditors [must] wait seven business days after they provide the early disclosures before closing the loan
- Creditors [must] provide new disclosures with a revised annual percentage rate (APR), and wait an additional three business days before closing the loan, if a change occurs that makes the APR in the early disclosures inaccurate beyond a specified tolerance [.125%].”

UPDATE: DEADLINE FOR RED FLAGS RULE EXTENDED TO NOVEMBER 1

Last week the Federal Trade Commission announced a three month extension of the Red Flags Rule deadline. The FTC moved the deadline from August 1 to November 1, to give creditors and financial institutions more time to implement a written Identity Theft Prevention Program, also known as a Red Flag Policy. (For more information on this FTC requirement, see www.ftc.gov/opa/2009/07/redflag.shtm or contact us with questions.)

FHA UPDATE

HUD frequently publishes updates, known as Mortgagee Letters, containing new policies and other information for lenders. Since our last newsletter, HUD has published four additional letters. Below is a brief summary of all four:

• Home Equity Conversion Mortgage Refinancing of Existing Loans: Letter 09-21. This letter discusses a technical correction for the HECM program, and reiterates guidelines for refinancing HECM mortgages.

“FHA will insure all loans that were originated for the purpose of refinancing an assigned loan that is not in a due and payable status for reasons that cannot be corrected, such as death of the last mortgagor or conveyance of title by all mortgagors, but closed on or after October 6, 2008, the date of the Final Rule.” (Click here to view the entire letter.)

• Revised Temporary Authority for Multifamily Hubs to Process Waiver Requests Pertaining to the Three-Year Rule for Section 223(f) Apartments: Letter 09-22. This letter “rescinds and replaces ML 2009-06… [and] sets forth the Department’s revised policy to grant temporary authority to Multifamily Hub Directors to waive the Three-Year Rule for Section 223(f) applications, for the purpose of providing liquidity to recently constructed or substantially rehabilitated, self-sustaining properties that are unable to secure permanent long term financing due to the freeze in the capital markets…” (Click here to view the entire letter.)

• Making Home Affordable Program: FHA's Home Affordable Modification Loss Mitigation Option: Letter 09-23. This letter “announces a new FHA Loss Mitigation option, the FHA-Home Affordable Modification Program (FHA-HAMP). FHA-HAMP will provide homeowners in default a greater opportunity to reduce their mortgage payments to a sustainable level. This Mortgagee Letter is effective August 15, 2009… FHA-HAMP can be utilized only if the mortgagor(s) does not qualify for current loss mitigation home retention options…”

A Few Highlights/Guidelines:
- Partial claim up to 30 percent of the unpaid principal balance as of the date of default combined with a loan modification
- Mortgagor must successfully complete a three month trial payment plan, making each scheduled payment on time.
- Servicer must obtain an executed Hardship Affidavit (available at https://www.hmpadmin.com/portal/docs/mod_docs/hamphardshipaffidavit.pdf) from every mortgagor and co-mortgagor seeking an FHA-HAMP
- Front end debt to income ratio must be as close as possible, but not less than, 31 percent
- Back end debt to income ratio must not exceed 55 percent
- Mortgagee may receive an incentive fee of up to $1,250 (Click here to view the entire letter.)

• Housing Tax Credit Coordination Act of 2008: Letter 09-24. This letter “describes the additional authority granted under HERA and the Department’s implementation of Sections 2832 and 2834 of the Act.

- Section 2832 of HERA requires the Secretary to implement administrative and procedural changes to expedite the approval of multifamily housing projects utilizing FHA mortgage insurance programs with either Low-Income Housing Tax Credits or tax-exempt housing bonds…
- Section 2834 of HERA provides three substantive changes to the Department’s processing of certain FHA mortgage insurance applications.” (Click here to view the entire letter and the details of all changes.)

To view all HUD Mortgagee Letters for the year, visit the official website www.hud.gov/offices/adm/hudclips/letters/mortgagee/index.cfm.

FANNIE MAE UPDATE (Coming next newsletter)

FREDDIE MAC UPDATE (Coming next newsletter)

FHA Guidelines: How to Become FHA Approved

An easy to understand summary of FHA approval requirements for lenders.

FHA has grown rapidly in the past few years, fueled largely by tightening credit. In fact, over 20% of new home purchases are currently through FHA. As the volume of FHA loans increases, more lenders across the country are becoming FHA approved. However, the FHA approval process and paperwork can appear overwhelming, especially to smaller companies. To help lenders understand the guidelines, below is a brief summary of FHA’s approval requirements. (For a detailed list of all requirements, visit www.hud.gov.)

Organization Requirements

In order to reduce risk, FHA limits its approval to experienced, well-established organizations; the officer in charge of an organization’s FHA operation must have at least three years of mortgage experience. Furthermore, to be considered for FHA approval, an organization cannot be a sole proprietorship. Corporations, partnerships, LLC’s, chartered financial institutions, and government agencies are acceptable. Along the same lines, FHA approved organizations must have at least two full time employees and a commercial office location (not a home office).

Paperwork

Each prospective FHA lender must fill out the HUD 11701 application. FHA also requires certain letters and other documents, depending on the desired type of FHA approval (non-supervised loan correspondent, investing lender, etc.). For example, brokers wanting to become FHA approved must submit a sponsor/funding letter, whereas lenders need a funding program. For a list of all required documents by FHA approval type, see FHA Lender Approval Requirements.

Finances

Excluding “Government Mortgagee,” the application fee for all FHA approval types is $1,000. Additionally, lenders must submit audited financial statements with the application. The lender’s financial statements need to show at least $63,000 net worth with 20% liquid assets.

Quality Control Plan

Finally, FHA approval requires organizations to submit a quality control plan, in order to mitigate fraud and errors. Organizations can create a quality control plan themselves, or purchase one from a third party. As part of the quality control plan, lenders must audit 10% of the FHA loans they originate. These audits need to be performed regularly—within 90 days of the end of the month in which the loan closed.

Quality control audits may be performed in-house, if the lender properly trains and establishes a unit solely for quality control. The staff must not be involved in loan production. Alternatively, lenders may have a third party, such as Mortgage Compliance Advisors, LLC, perform the quality control function, as long as it meets HUD’s requirements.

For more information on FHA approval services or quality control audits, visit www.MortgageComplianceAdvisors.com or call 877-226-3217.

About Mortgage Compliance Advisors (MCA):

MCA has grown to help clients across the country through the FHA approval process, and continues to help them stay compliant with regulations after approval. MCA's principals have a combined sixty years of experience in the mortgage industry, including thirteen years at the Salt Lake City HUD/FHA office. As a former FHA branch chief, MCA’s principal Bob Warnock can advise clients through every step of the FHA approval process.

MCA Quoted in American Banker

On July 2, 2009, Mortgage Compliance Advisors was mentioned in the national publication American Banker, in the article FHA Enforces Fine Print as Its Volume Swells. The article discusses how FHA is more strictly enforcing regulations, because of its rapid growth.

“The Department of Housing and Urban Development, which runs FHA, has stepped up …enforcement actions in the last year. And with FHA now guaranteeing roughly 30% of all originations, raising the agency's public profile and its risk, many in the industry expect a further, and dramatic, increase.”

The article cites specific examples of FHA enforcement actions, and quotes MCA’s principals Bob Warnock and Craig Christensen regarding FHA quality control and a few necessary actions to comply with FHA. To read the full article, click here (Note: American Banker requires a login to view full articles).

MCA Monthly Update - July 2009

Welcome to the MCA Monthly Update. To help you stay compliant and up-to-date, each newsletter we send contains underwriting tips, processing tips, and compliance updates. We hope that you find the content informative and useful.

For next month’s newsletter, we would like to address the biggest issues you are facing in the mortgage industry. Please let us know about any industry issues that you find confusing, or if you just want some more information. We’ll try to answer all your questions in the next newsletter.

REMINDER: APPROACHING DEADLINE OF RED FLAGS RULE

As a reminder, the Federal Trade Commission’s Red Flags Rule will go into effect in less than a month, on August 1. The FTC will require that all financial institutions and creditors, including mortgage brokers and mortgage lenders, have in place a written identity theft prevention program, also known as a Red Flag Policy. (For more information, visit www.FTC.gov or contact us with your questions.)

UNDERWRITING & PROCESSING TIPS

Based on some common findings from quality control audits, we have compiled a list of three tips from the month of June.

1. Make sure that the application and initial disclosures have correct dates. If they are mailed, be sure to date stamp when they were sent in the mail, to stay in compliance with the three day rule.

2. For Prepaid Finance Charges (PFC’s), make sure that they are disclosed accurately on the initial TIL, and clearly marked on the initial Good Faith.

3. Last month we mentioned that everyone should have a closing package from the closing agent for their file. FHA requires lenders to get and maintain copies of at least the HUD-1’s, Note, Deed of Trust, and the final Truth in Lending.

FHA UPDATE

HUD frequently publishes updates, known as Mortgagee Letters, containing new policies and other information for lenders. Since our last newsletter, HUD has published three additional letters. Below is a brief summary of all three:

• Energy Efficient Mortgages – Increase in the Dollar Amount of Energy Efficient Improvements: Letter 09-18. “In addition to the base FHA maximum mortgage amount limit, which is calculated on the value of the home, the mortgage loan amount for an Energy Efficient Mortgage (EEM) can be increased by the cost of effective energy improvements…

The maximum amount of the portion of the EEM for energy improvements is the lesser of 5% of:
o the value of the property, or
o 115% of the median area price of a single family dwelling, or
o 150% of the conforming Freddie Mac limit.” (Click here to view the entire letter.)

• Condominium Approval Process – Single Family Housing: Letter 09-19. FHA “is implementing a new approval process for Condominium Projects to insure mortgages on individual units… FHA will now allow lenders to determine project eligibility, review project documentation, and certify to compliance of Section 203(b) of the NHA and 24 CFR 203 of HUD’s regulations.

…[this letter] provide[s] guidelines and instructions on options available to lenders to receive mortgage insurance on condominium units which are located in a project.” (Click here to view the entire letter.)

• Processing Pre-Application Firm Invitation and Firm Commitment Extension Requests: Letter 09-20. This letter discusses FHA’s “policy to grant temporary authority to Multifamily Hub/Program Center Directors to grant one extension, for up to 90-days, of the pre-application firm invitation letter and one 120-day extension of an issued Firm Commitment. The authority granted under this Mortgagee Letter expires December 31, 2009.” (Click here to view the entire letter.)

To view all HUD Mortgagee Letters for the year, click here.

MCA Monthly Update - June 2009

Welcome to the MCA Monthly Update. To help you stay compliant and up-to-date, each newsletter we send contains underwriting tips, processing tips, and compliance updates. We hope that you find the content informative and useful. As always, your feedback is appreciated.

RED FLAG POLICY

Beginning August 1, 2009, the Federal Trade Commission (FTC) will require that all financial institutions and creditors, including mortgage brokers and mortgage lenders, have in place a written identity theft prevention program, also known as a Red Flag Policy. This policy should provide for the identification, detection, and response to patterns, or specific activities that could indicate identity theft. We’ve included a link that further explains the Red Flags Rule, as well as a link to the press release that extends the deadline from May 1 to August 1.

Explanation of Red Flags Rule - http://www.ftc.gov/bcp/edu/pubs/business/alerts/alt050.shtm
Extension Press Release - http://www.ftc.gov/opa/2009/04/redflagsrule.shtm

If you have questions about implementing a Red Flag Policy in your organization, let us know.

UNDERWRITING & PROCESSING TIPS

Based on some common findings from quality control audits, we have compiled a list of four tips from the month of May.

1. On the Good Faith Estimate, prepaid finance charges (PFC’s) are often marked incorrectly. Some are marked as PFC’s that should not be, and vice versa. Make sure to be mindful when marking PFC’s.

2. If the borrowers do not indicate their ethnicity on the Initial Application under “Government Monitoring,” the loan officer is required to fill it in. This can be based on the loan officer’s best estimate, based on observation or the borrower’s name.

3. Many brokers do not have approval documentation from the lender. If the broker simply asks for the approval documentation, the lender can get it. This documentation should be in the file.

4. Everyone should get a closing package from the closing agent for their file.


FHA UPDATE

HUD frequently publishes updates, known as Mortgagee Letters, containing new policies and other information for lenders. Since our last newsletter, HUD has published two additional letters. Below is a brief summary of both:

• Manufactured Housing Policy Guidance – Property and Underwriting Eligibility: Letter 09-16. “This Mortgagee Letter provides guidance on manufactured housing eligibility requirements for FHA mortgage insurance under Title II of the National Housing Act.” (Click here to view the entire letter.)

• Accuracy of Lender Data for FHA-approved Mortgagees: Letter 09-17. “In an effort to strengthen its controls, the Department will eliminate the paper version of the Yearly Verification Report (V-Form) required for all renewing FHA-approved lenders and replace it with an automated Annual Certification process completed in the FHA Connection. Only corporate officers and principal owners with authority to legally bind the corporation or entity will be permitted to complete the Annual Certification on behalf of an institution. …In order to prepare for these new requirements, all FHA approved lenders must confirm or update the information stored in the FHA Connection regarding their institutions so that it is accurate and complete.” (Click here to view the entire letter.)

To view all HUD Mortgagee Letters for the year, click here.

If you have any questions, simply call us at 877-226-3216.

Mortgage Compliance Advisors Announces Launch of Red Flag Template

With the Federal Trade Commission’s announcement of the Red Flags Rule beginning August 1, 2009, Mortgage Compliance Advisors launches its Red Flag Policy Template for mortgage brokers and lenders.

Salt Lake City, UT – May 21, 2009 – Earlier this month, the Federal Trade Commission announced its extension of the Red Flags Rule from May 1 to August 1, 2009. Beginning August 1, all financial institutions and creditors with covered accounts must comply with the Red Flags Rule. (For more information, visit ftc.gov.) The FTC stated that this rule is designed to reduce identity theft by requiring organizations to “implement a written Identity Theft Prevention Program designed to detect the warning signs – or ‘red flags’ – of identity theft in their day-to-day operations, take steps to prevent the crime, and mitigate the damage it inflicts.” An organization’s Identity Theft Prevention Program, also known as a Red Flag Policy, must be appropriately tailored to its size, risks, and complexity. To help mortgage brokers and lenders comply with the Red Flags Rule, Mortgage Compliance Advisors announced the launch of its succinct, customizable Red Flag Policy template.

Mortgage Compliance Advisors (MCA) is partnering with Hudson Cook, LLP, to offer this template, The Mortgage Industry Guide to the Red Flags Rule. The template contains required Red Flag policies and procedures, which include: identifying and detecting red flags, preventing and mitigating identity theft, and periodically updating the program. To create a customized Red Flag Policy, clients may purchase and personally fill out this template; or the client may provide MCA with basic information about the organization, and MCA can fill out the policy template. In order to comply with the Red Flags Rule, organizations must have the policy in place by August 1, 2009.

For more information on the Red Flag Policy Template, visit www.MortgageComplianceAdvisors.com/red_flag_rule.php or call 877-226-3217.

FHA Guidelines Require 10% Quality Control File Audits

As the number of FHA loans rapidly increases, HUD stresses the requirement to implement and maintain a comprehensive quality control plan that follows FHA guidelines.

FHA insured mortgage loans experienced phenomenal growth in 2008. After a large drop in its share of new mortgages in the early ‘90’s, tightening credit has caused an upsurge in FHA loans. In fact, FHA’s share of insured mortgages increased to 26% in 3rd quarter 2008, up from only 3% in 2007. As the volume of FHA loans increases, more lenders are becoming FHA approved. Once approved, they are met with the task of staying in compliance with FHA guidelines. In Mortgagee Letter 09-12 published for FHA approved lenders, HUD stresses the requirement to “implement and maintain a comprehensive quality control plan.” HUD further explains in Letter 09-01 that if a lender “fails to comply with HUD’s policies and procedures, HUD will take the appropriate action…which may include termination of mortgagee [FHA] approval.” (To view all HUD mortgagee letters, visit HUD's official website.)

According to FHA guidelines, before a lender can become FHA approved, they must submit a quality control plan. As stated in chapter 7 of the HUD 4060.1 handbook, a lender “must review [audit] 10% of the FHA loans it originates,” as part of its quality control plan. These mortgage audits can either be performed internally or by a third party provider. If done internally, the lender must establish and properly train a unit dedicated to quality control. FHA guidelines go on to explain that the staff must not be involved in loan production.

Third party providers can also perform these mortgage file audits, and even provide quality control plans that meet FHA guidelines. For example, Mortgage Compliance Advisors, LLC, can provide a quality control plan and perform the required quality control file audits for an FHA approved lender. When the file audits for a certain period are complete, the audit findings are compiled in a management report and sent to the lender. Third party providers do not report to HUD/FHA. Instead, it is the responsibility of management to review the findings and make any necessary changes to prevent similar findings in the future. When FHA conducts an audit, they want to see in writing what actions have been taken by the lender to stay in compliance with FHA guidelines.

For more information on quality control file audits or FHA guidelines, visit www.MortgageComplianceAdvisors.com or call 877-226-3217.

MCA Monthly Update - April 2009

Welcome to the MCA Monthly Update. To help you stay compliant and up-to-date, each newsletter we send in the future will contain underwriting tips, processing tips, a quality control update, and an FHA update. For this month, we thought it would be helpful to summarize a few of HUD’s official mortgagee letters for the year. We hope that you find the content informative and useful. As always, your feedback is appreciated.

FHA UPDATE

HUD frequently publishes updates, known as Mortgagee Letters, containing new policies and other information for lenders. For the year 2009, HUD has already posted 14 letters. Below is a very brief summary of five of them, along with our interpretation:

· Annual Renewal of FHA Approval: Letter 09-01. “In order to maintain its status as an FHA-approved mortgagee, a mortgagee is required, among other things, to timely file annual audited financial statements that meet the requirements of the Secretary, sign and submit a yearly verification report and pay an annual fee for its main and registered branch offices.

…If a mortgagee fail[s] to meet one or more of the…annual renewal requirements, the Department [sends] a Notice of Violation… The Mortgagee Review Board may, among other things, impose penalties and/or withdraw the mortgagee’s FHA-approval or permit the Department to enter into a settlement agreement… If a mortgagee’s FHA-approval is terminated, that mortgagee may not reapply for FHA approval until 12 months after the effective date of their termination.”

MCA Interpretation – FHA is going to be tougher on late renewals by brokers and lenders, and may not allow a late renewal at all.

· Loan Limit Increases for FHA: Letter 09-07. Under both HERA and ESA, and thus under ARRA as well, the FHA national floor limits remain set at the 65 percent amount (the “floor,”) by property size.

MCA Interpretation – FHA has changed the loan limit floor and ceiling. To check for the loan limit in each area, go to https://entp.hud.gov/idapp/html/hicostlook.cfm

· Limits on Cash-Out Refinances: Letter 09-08. “Effective for case number assignments on or after April 1, 2009, the loan-to-value (LTV) of any cash-out refinance to be insured by FHA may not exceed 85 percent of the appraiser’s estimate of value.”

· Adoption of Market Conditions Addendum (Fannie Mae Form 1004MC/Freddie Mac Form 71) and Appraisal Reporting Requirements for Properties located in Declining Markets: Letter 9-09. “In order to ensure greater transparency and accuracy of appraisals performed for FHA-insured financing, FHA will adopt the Market Conditions Addendum (Fannie Mae Form 1004MC/ Freddie Mac Form 71, released November 2008).”

MCA Interpretation – Appraisals performed after April 1, 2009 must include the market condition addendum. FHA lenders are responsible for poor or fraudulent appraisals.

· Mortgagee Monitoring: Letter 09-12. “While not an exhaustive list, it is imperative that you ensure your organization:

- implements and maintains a comprehensive quality control plan,

- reviews all loans with early payment defaults;

- does not engage in false or misrepresentative advertising;

- fully documents the stability and amount of borrower(s) income; and,

- does not charge excessive and unallowable fees to the borrower.”

To view the complete letters, visit www.hud.gov/offices/adm/hudclips/letters/mortgagee/index.cfm. The remaining letters address multiple topics, including free education and outreach flyers to distribute to FHA borrowers, Tier 1 rankings with increased loss mitigation incentives, guidance for the HECM for Purchase program, etc.

For more information on FHA compliance, visit www.MortgageComplianceAdvisors.com.