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• HUD Issues Mortgagee Letter for Small Supervised Lenders (ML 2011-25)
• Applicability of Mortgagee Letters to Auditors
• 2011 Continuing Professional Education Schedule
• CPE Registration
• Course Highlights

On July 28, 2011 HUD released Mortgagee Letter 2011-25 - Alternative Reporting Requirements for Small Supervised Lenders and Clarification of Requirements for Supervised Lenders in Parent-Subsidiary Relationships. This M/L allows supervised lenders whose consolidated assets do not meet the threshold required to submit audited financial statements (less than $500 million in assets in 2010) are not required to submit audited financial statements to FHA, or an audited computation of net worth. This exemption will expire on April 7, 2012.

However, these lenders are still required to submit:

1. Unaudited regulatory report (Call Report) or Thrift Financial Report, or NCUA Call Report that aligns with their fiscal year end. (See M/L for details)
2. Report on Internal Control as it relates to administering HUD-assisted programs
3. Report on Compliance with specific requirements applicable to major and non-major HUD programs.

HUD has also issued an FAQ on the M/L. This letter offers guidance and an alternative to the requirement to upload the reports in LASS and issue an Agreed-Upon Procedures report.

The regulatory report should be uploaded in the auditor's footnote tab in LASS.

Additionally, because the LASS system has not been updated to load ONLY the reports described above, clients must enter zeros or the unaudited regulatory report data in the LASS Financial Data Template.

Auditors may upload a disclaimer of opinion stating that they are not attesting to the financial information entered into the LASS FDT. If uploading a disclaimer of opinion, auditors should specify that this is the type of audit being submitted under line item G3000-006. In order to complete the submission, auditors will need to mark "agrees" in the AUP template.

HUD will accept a hard copy of the auditor-required reports (internal control and compliance) to be mailed in. Subsequent conversations with LASS personnel have indicated that the regulatory reports may also be mailed. Mailing the reports eliminates the need for any financial data to be entered or for the auditor to issue an AUP report on the filing. If mailing, please note the following:

1. Two copies of each report must be submitted
2. Cover letter with FHA lender/mortgagee ID number that claims the exemption for supervised lenders under the April 7, 2011 waiver must be included.
3. FHA lender/mortgagee ID number must be written on the upper right-hand corner of each separate document.
4. All lenders must pay the annual fee and submit the annual certification online via the FHA Connection.
5. Lender's recertification will be considered "submitted" from the date of receipt of mailed reports by FHA's Office of Lender Activities and Program Compliance.

Mail to:

Office of Lender Activities and Program Compliance

Attention: Jason Boldin

490 L'Enfant Plaza East, S.W.

Suite 3214

Washington D.C. 20024

Phone : 202-708-1515

The M/L also changed reporting requirements for lenders in Parent-Subsidiary Relationships. Supervised lenders in parent-subsidiary structures that choose to submit audited consolidated financial statements of a parent company in accordance with ML 2011-05 are no longer required to submit internally prepared consolidating schedules. Instead, lenders must submit a copy of the subsidiary's unaudited regulatory report. In addition, net worth and liquidity requirements must be met by the FHA-approved lender regardless of the lender's financial reporting documentation.

With the issuance of the above mortgagee letter, we have received various comments about the applicability of M/Ls that conflict with or are not covered by the Guide. OIG wishes to remind users that they are to ensure that they remain in compliance with guidance issued after Chapter 7. This guidance is included in Chapter 7-3 of the Guide and is included below:

7-3 Reference Material. The following is the reference material that was in effect at the time this handbook chapter was issued. It is the auditor's responsibility to use the appropriate reference material that was in effect during the period covered by the audit.

Mortgagee Letters are included in the references subject to the above guidance.

• Multifamily Update & Lender Update Courses:
• Regular Registration $375* 
• AHACPA Member Registration $325*
• 8 CPE Hours
  
  * Add $25 for New York, Chicago & Boston   

• Multifamily Conference:
• Regular Registration $625
• AHACPA Member Registration $575
• Register before October 20th (with payment) to receive $50 early registration discount.
• 16 CPE Hours 

Click here to register with a credit card - Regular registration

 Click here to register with a credit card - AHACPA Member registration (member ID required)

Click here to download a printable registration form

Course Fee:

$375 ($400 for New York, Chicago & Boston)

 Members of AHACPA receive a $50 discount

Course Fee:

$375 ($400 for New York, Chicago & Boston)

Members of AHACPA receive a $50 discount 

Course Fee:

$625. *Register before Oct. 20th to receive a $50 early registration discount.

Members of AHACPA receive a $50 discount 

AHACPA is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.learningmarket.org.