Herb Thomas Mortgage License News http://www.thomas-law.com

HUD Net Worth Still $250,000

Here is the actual HUD News Release and if you look at the language below, the increase by $1,000,000 is contingent upon a Proposal being made [which has not occurred yet] and that it would not become effective until one year after the Proposal is adopted as Final.  Therefore, it should be at least a year before the HUD Full Eagle net worth requirement increases above the $250,000 amount. 

HUD No. 09-177 Melanie Roussell (202) 708-0685 www.hud.gov/news/

For Release Friday September 18, 2009

 

Increase Net-Worth Requirements for Mortgagees

The FHA plans to propose to increase the net worth requirement for approved mortgagees to meet industry standards. The requirement is currently at $250,000 and has not been increased since 1993. HUD is proposing an initial increase of approximately $1,000,000 that would be in place within one year of the enactment of this rule. To maintain consistency with industry standards, HUD may propose that the net worth requirements be increased further in future years to a level comparable to those required by GSEs and other market institutions. These changes will help to ensure that FHA lenders are sufficiently capitalized to meet potential needs, thereby permitting HUD to mitigate losses and decrease risks to the FHA insurance fund.

 

HUD Revises FAQs on Revised RESPA Rule

On October 23, the U.S. Department of Housing and Urban Development (HUD) again revised its "Frequently Asked Questions" regarding its 2008 amendments to Regulation X, the Real Estate Settlement Procedures Act's  (RESPA) implementing regulation. Link:
http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs.pdf

MORTGAGEE LETTER 2009-42 dated 10-19-2009 says all mortgagees that service FHA insured mortgages must be FHA –approved, and this includes sub-servicing mortgagees

MORTGAGEE LETTER 2009-42 dated 10-19-2009: Summary: An FHA-approved servicer may enter into a sub-servicing agreement to perform loss mitigation services on behalf of another FHA-approved servicer, however,  all mortgagees that service FHA insured mortgages must be FHA –approved, and this includes sub-servicing mortgagees.

MORTGAGEE LETTER 2009-42

 

 

TO:      ALL APPROVED MORTGAGEES

      ALL APPROVED SERVICERS

 

SUBJECT:    Sub-Servicing of FHA-insured Mortgages

 

 

    The recent mortgage crisis, and the Administration’s response to this crisis, has increased the demand for loss mitigation services.  In many instances, the need for loss mitigation services may have outpaced many servicers’ capacity to process defaulted borrowers requests in a timely manner.  To ensure that FHA approved mortgagees and their servicers can respond to all loss mitigation requests, this Mortgagee Letter summarizes things that mortgagees and servicing mortgagees need to keep in mind if they need to expand their servicing capacity including loss mitigation processing capacity. As a reminder, the servicing of FHA-insured loans must be performed by a mortgagee that is approved by FHA pursuant to FHA regulations.  See 24 CFR §§202.5 and 203.502.  The regulations do not preclude an FHA approved from performing servicing actions on behalf of another FHA-approved servicer or at the direction of an FHA-approved mortgagee.  For example, an FHA-approved servicer may enter into a business arrangement to perform loss mitigation services on behalf of another FHA-approved servicer.  Within the industry, those business arrangements are often referred to as sub-servicing agreements.  As stated in Mortgagee Letter 93-03, issued January 7, 1993, all mortgagees that service FHA insured mortgages must be FHA –approved, and this includes sub-servicing mortgagees. Although sub-servicers presently are neither specifically identified nor tracked in any FHA system, holding mortgagees and servicing mortgagees that decide to use sub-servicing mortgagees must ensure that the sub-servicer  is an FHA approved mortgagee .  Under FHA’s regulations 24 CFR §203.502, “The mortgagee shall remain fully responsible to the Secretary for proper servicing, and the actions of the servicer shall be considered to be the actions of the mortgagee.  The servicer shall also be fully responsible to the Secretary for its actions as a servicer.”  In turn, the holding mortgagee is responsible for the actions of the sub-servicer, and the sub-servicer is responsible to the Secretary as an approved mortgagee for its actions in servicing the FHA mortgages. In summary, to meet the increased need for loss mitigation, the Department has no objection to mortgagees entering into subservicing agreements with other FHA- approved servicers to perform loss mitigation functions.  As a reminder, the costs associated with subservicing are treated the same as for outsourcing in that the costs of such services may not be imposed on the FHA mortgagor or passed along to the Department on any subsequent claim for mortgage insurance benefits.  This prohibition also extends to independent contractors that often target mortgagors in distress and then charge for their services.  Too many distressed mortgagors have been taken advantage of by so-called loss mitigation or foreclosure avoidance “counselors”.  FHA-approved mortgagees and mortgage servicers must not assist in legitimizing the services of those individuals that prey on distressed mortgagors.  Questions regarding this Mortgagee Letter may be directed to HUD’s National Servicing Center (NSC) at 888-297-8685 or hsg-lossmit@hud.gov.  Persons with hearing or speech impairments may access this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).  Sincerely,  David H. Stevens, Assistant Secretary for Housing –Federal Housing Commissioner

 

 

FHA/HUD Exemption Are Near Extinction

HUD Full Eagle States for Exemption

LICENSE EXEMPTIONS DUE TO STATUS AS: FULL EAGLE HUD Approved Non-supervised Mortgagees with Direct Endorsement Underwriting Authority

A. Exemption Registrations Texas - 1st Broker & Lender Registration -Requires HUD FULL EAGLE WITH Direct Endorsement B. Exemption Not Verifiable Hawaii - Broker & Lender NOT VERIFIABLE -State will not provide Written Confirmation Ohio - Broker & 1st Lender (Limited Exemption) NOT VERIFIABLE -Requires OH Direct Endorsement to be HUD Approval Area & limited to HUD underwriting criteria loans C. Exemptions Eliminated Missouri - Lender Registration RECENTLY ELIMINATED Oklahoma - Broker & 1st Lender RECENTLY ELIMINATED Alabama- RECENTLY ELIMINATED Indiana-ELIMINATED 7/1/08 Kentucky- Broker & Lender SEVERELY RESTRICTED -Effectively eliminated by new rule requiring HUD approval for 5 previous yrs. to qualify Mississippi- RECENTLY ELIMINATED Montana-1st Lender ELIMINATED -license required as of 10/1/08 Tennessee - HUD Registration RECENTLY ELIMINATED -200,000 Surety Bond Required Now

HUD Mini Eagle States for Exemption

LICENSE EXEMPTIONS DUE TO STATUS AS: MINI EAGLE HUD Approved Correspondent Lenders

A. Exemption SEVERELY RESTRICTED Kentucky- Broker SEVERELY RESTRICTED -Effectively eliminated by new rule requiring HUD approval for 5 previous yrs. to qualify B. Exemption Not Verifiable Hawaii - Broker & Lender NOT VERIFIABLE -State will not provide Written Confirmation C. Exemptions Eliminated Missouri - Broker- RECENTLY ELIMINATED Oklahoma - Broker RECENTLY ELIMINATED Alabama- RECENTLY ELIMINATED Indiana-ELIMINATED 7/1/08 Mississippi- RECENTLY ELIMINATED Tennessee - RECENTLY ELIMINATED -90,000 Surety Bond Required Now

Fannie Increases Net Worth Requirement according to Mortgage Chronicle.com

Mortgage Industry News Headlines Summary of stories published by | Mortgage Statistics

Last Updated Wednesday, September 17, 2008 02:33 PM CST

According to the 9-17-2008 issue of Mortgage Chronicle.com, Fannie Mae issued a bulletin indicating it updated its lender eligibility and contractual requirements. The revisions were prompted by "extraordinary circumstances occurring in the mortgage industry over the past several months," Announcement 08-23 stated. Beginning on Dec. 31, 2008, new lenders will be required to have a $2.5 million net worth, excluding goodwill and other intangible assets.