Legislative Alert
April 7, 2010
Dear NAMB Member,
In conjunction with the Legislative Alert sent yesterday, please find below some clarifications on the new FHA Final Rule, to be published shortly, on mortgage broker FHA-approval eligibility. Stay tuned for emails from NAMB with more information on this issue:
1. If you are presently a mortgage broker approved by HUD for 2009, you can operate as in the past until the end of this year? Yes
Do I need to get an audit for 2010? No audit required. All you must do is re-certify through FHA Connection and pay the fee. FHA will extend your approval through 12/31/2010.
What will be the policy after 12/31/2010? You must secure a lender approved by FHA to sponsor you to originate FHA loans.
2. If you are not an approved FHA mortgage broker today, then you may originate FHA loans via a lender sponsor without the need for any FHA approval, audit, fee, etc. soon after the rule becomes final (FHA is in the process of making system modifications to facilitate non-approved broker originations. Non-approved brokers must wait until these changes are made before they can participate. A Mortgagee Letter will be sent out once the final rule is published providing implementation time frames). The lender is completely responsible for the mortgage broker oversight and mortgage broker qualifications.
3. What if there was a gap? If you were FHA approved, then you let your approval lapse, can you get FHA approved for the remainder of this year? No. FHA will not extend the approval to those loan correspondents/mortgage brokers that are not in good standing for fiscal years prior to and including 2009. For this purpose, good standing means submission of acceptable audited financial statements, re-certification and payment of the recent fee.
4. What happens to the mortgage brokers in the pipeline today who have submitted for approval prior to the rule being released in the Federal Register? Two choices: (a) stay in the pipeline for approval. FHA will continue processing applications received prior to the publication of the final rule; (b) However, should those mortgage brokers with pending applications choose to withdraw their application, FHA will return the application package and fee.