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                                             FHA: 24 LENDERS TERMINATED
                                                    FOR HIGH DEFAULTS

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HUD-FHA has published today in the Federal Register a list of mortgagees that have had their Origination Approval Agreements terminated.

Approval of a mortgagee by HUD/FHA to participate in FHA mortgage insurance programs includes an Origination Approval  Agreement (Agreement) between HUD and the mortgagee. Under the Agreement, the mortgagee is authorized to originate single-family mortgage loans and submit them to FHA for insurance endorsement. The Agreement may be terminated on the basis of poor performance of FHA-insured mortgage loans originated by the mortgagee.

HUD's regulations permit HUD to terminate the Agreement with any mortgagee having a default and claim rate for loans endorsed within the preceding 24 months that exceeds 200 percent of the default and claim rate within the geographic area served by a HUD field office, and also exceeds the national default and claim rate.

For the 41st review period, HUD is terminating the Agreement of  mortgagees whose default and claim rate exceeds both the national rate and 200 percent of the field office rate.

Federal Register Notice:
List of Terminated Lenders and Termination Dates

REDUCE HIGH FHA Defaults
 

Our Compare Ratio Task Force is designed to reduce high
 Compare Ratios caused by excessive defaults and claims.

Task Force Description
  • Staffed with subject matter experts and skilled auditors
  • Specially designed checklists and automated file screening systems
  • State-of-the-art quality control, compliance, forensics, and modern research facility
  • Scalable up to virtually any size default and claims experience
  • Upload/download large file formats for prompt reviews
  • Located in a secured and safe audit location
Our Remedy
  • Comprehensive review of existing defaults and claims for loss mitigation  and loan modification eligibility
  • HUD-FHA and regulatory compliance guidance for the mortgagee
  • FHA and conventional Early Payment Defaults resolution strategies and loss mitigation methodologies
  • Notification to mortgagee of borrower's loss mitigation eligibility
  • Notification of loss mitigation eligibility to the borrower
  • Referrals to expert, nationwide legal counsel to handle loss mitigation and loan modification strategies
  • Monitoring of loss mitigation applications in process
  • Follow-up with servicers to assure proper and timely resolution and notification to HUD-FHA
  • On-going review and loss mitigation of new defaults and claims

The Compare Ratio provides a value that reveals the largest discrepancies between the mortgagee's default and claim percentage and the default and claim percentage to which it is being compared.

An indicator of excessive defaults and claims is the FHA Compare Ratio statistic. When a Compare Ratio is above 150, HUD begins a due diligence process.

Mortgagees with a Compare Ratio of greater than 200 are subject to disciplinary review, termination of underwriting authority, and possible loss of FHA mortgagee approval.


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Ext: 204 -Task Force



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Credit Watch Termination Initiative

Federal Register: Vol. 75, No. 67, pp 17944-17946
April 8, 2010 - Notices




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Lenders Compliance Group
is a full-service, mortgage risk management firm, providing professional guidance to financial institutions in all areas of mortgage compliance.

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