FHA Extends Deadline to Submit Audited Financials. Elimination of Correspondent/Broker Approval Still Pending
Via email, I recieved the following guidance from the FHA this morning:
Subject: Guidance for Currently FHA-Approved Loan Correspondents Regarding Renewal of FHA Lender Approval for 2010
As proposed in a November 30, 2009 via 74 FR 62521, HUD is seeking to eliminate FHA approval for loan correspondents. Because this rulemaking is still in process and a final rule has not yet been issued, FHA is extending the deadline for the submission of audited financial statements for loan correspondents seeking renewal of their FHA lender approval for 2010.
For loan correspondents with a fiscal year end of December 31, and that would ordinarily be required to renew their FHA approval by March 31, 2010, HUD is providing these lenders with an additional 30 days in which to submit their audited financial statements. These loan correspondents must continue to comply with existing requirements for the submission of their Annual Certifications and renewal fees, but will be given until April 30, 2010, to submit audited financial statements. Again, the deadline for the submission of the Annual Certification and renewal fee has not been changed.
Loan correspondents that do not complete their renewal in accordance with the deadlines as specified above will no longer be FHA-approved as of the effective date of the final rule that follows the November 30, 2009, proposed rule.
Here is the verbiage from the Federal Register about the proposed change that would eliminate the need for brokers and correspondents to gain direct approval from the FHA:
FHA proposes to no longer approve loan correspondents as approved participants in FHA programs.
Mortgagees would be required to ensure that their loan correspondents meet applicable requirements. The FHA approved mortgagee will, in turn, act as sponsor as it has in the past. However, in using a sponsor/correspondent relationship, the sponsoring mortgagee must agree to assume responsibility for any loan correspondent that works with the mortgagee in the FHA insured loan, and assume liability for the FHAinsured loan underwritten and closed in the name of the FHA-approved mortgagee.
If you have questions regarding this issue, please contact the FHA Resource Center by email at email@example.com, or by telephone at 1-800-CALL-FHA (1-800-225-5342). Persons with hearing or speech impairments may access this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).
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