The Federal Housing Administration (FHA) has announced plans to introduce new credit and servicing guidelines that are designed to protect its mortgage insurance fund.
‘To lower our down payment means taking too many borrowers out of the marketplace who actually have the ability to pay,’ says Vicki Bott, deputy assistant secretary for single-family housing at the FHA, during a presentation at the Mortgage Bankers Association's National Mortgage Servicing Conference & Expo in San Diego. ‘It is a balancing act.’
Bott says the FHA also plans to cut 14 Department of Housing and Urban Development (HUD)-approved management and marketing contractors that market and manage single-family properties that are either owned by HUD or in the department's custody. The FHA will also create a single conveyance system that will cover the entire country, eliminating the current system with multiple contractors spread out in different regions, and it will outsource contractors for property management and disposition. The FHA will also place a greater emphasis on underwriting quality control, and Bott promised that third parties engaged in unsatisfactory underwriting will be suspended from participating in FHA programs.
‘In this case, it will allow us to take action on retail underwritten loans, as well as wholesale or third-party underwritten loans,’ she says.
SOURCE: Federal Housing Administration