FHA Takes Action Against 240 Lenders
|August 2, 2011|
The Federal Housing Administration’s Mortgagee Review Board (MRB) announced hundreds of administrative actions against FHA-approved lenders who failed to meet its requirements. MRB sanctions against lenders include reprimands, probations, suspensions, withdrawals of approval and civil money penalties.
Click here to read the full text of MRB’s Federal Register Notice.
Since 2009, the MRB took more than 2,300 administrative actions against lenders, including a record 1,600 last year alone. Meanwhile, FHA instituted a number of new rules designed to strengthen risk management including increasing net worth requirements of FHA-approved lenders, strengthening lender approval criteria, and making lenders liable for the oversight of mortgage brokers.
FHA’s Mortgagee Review Board sanctions FHA-approved lenders for violations of the agency’s program requirements. For serious violations, the Board can withdraw a lender's FHA approval so that the lender cannot participate in FHA programs. In less serious cases, the Board enters into settlement agreements with lenders to bring them into compliance. The Board can also impose civil money penalties, probation, suspension, and issue letters of reprimand. The MRB publishes these actions after all appeals are exhausted and final determinations can be announced publicly.