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HUD to force lenders repay for the mortgage losses

Shared by Sara on Tue Oct 12, 2010 4:17 am
HUD (U.S. Department of Housing and Urban Development) has decided to seek authority to ask lenders to repay the losses in FHA loans which were originated though they did not meet the required guidelines. FHA would require the lenders to reimburse or indemnify the government against the losses. However, this new rule will apply to those lenders who are authorized to insure loans on behalf of FHA. Source: http://www.dsnews.com/articles/hud-proposes-tighter-rules-to-recoup-losses-from-fha-lenders-2010-10-11

Community Members Opinion

Niicss
Niicss

Joined: 03 Oct 2005

Posts: 4834
Location: New Jersey

508.88 Dollars($)

Posted: Tue Oct 12, 2010 4:29 am Post subject:

Hey Sara... Thanks for sharing the news. Lenders will have to indemnify HUD against losses on FHA loans if they had failed to verify the borrower's income, assets or creditworthiness. Moreover, if the lender had originated the loan when the appraisal did not meet the FHA guidelines, then too, the lenders will have to pay back HUD for their losses. I feel HUD has taken the right step as in the near future lenders will be wary to issue loans to those who do not meet the HUD guidelines.