This morning, FHA issued the news release below. FHA is very serious about improving the quality of the program. Keep in mind though that many of these “actions” were taken against lenders who had already gone out of business due to the economy. Therefore, they simply did not renew their FHA license.
FHA Commissioner David Stevens issued a warning yesterday to FHA lenders about underwriting and quality control standards. Most of what he discusses are issues I’ve often highlighted on this website.
HUD is seeking public comment on three proposals to help FHA control risk, and stem the losses from claims against the FHA mortgage insurance fund.
I have always respected the Wall Street Journal as a source of information. Yet all too often I find that when a subject I actually know something about is discussed, the information is off the mark! On May 4, 2009, there was an opinion piece on the online Wall Street Journal Opinion Journal entitled “The Next Housing Bust“. The opinion given in this piece may possibly have the right conclusion for all the wrong reasons.
HUD has created a new online version of the FHA guidelines. There will still be confusion – because HUD rarely makes the implementation of their guidelines completely clear – but at least the HUD 4155 will be up to date. Loan officers and processors can find the new online handbooks here.
For the first time ever, FHA appraisals have effectively actually had fewer extra requirements than conventional loan appraisals. This has been corrected effective April 1st with HUD Mortgagee Letter 2009-09 which establishes appraisal requirements for declining (in other words, most) markets. Of course, many of these policies have already been implicated in practice by lenders.
The long expected lowering of the FHA Cash Out Refinance Loan to Value has now occurred effective for Case Numbers dated April 1, 2009 or later. Details are available in Mortgagee Letter 2009-08 (opens as a Word document) dated March 12, 2009.
FHA Mortgagee Letter 2009-07 lays out the new FHA loan limits which were put into place by the American Recovery & Reinvestment Act of 2009.
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