Mortgagee Review Board Is Criticized For Ineffectiveness

rtgagee Review Board, the federal entity responsible for sanctioning mortgage lenders that violate Federal Housing Administration (FHA) policies, has been called ineffective and lethargic in a new report issued by the Department of Housing & Urban Development's (HUD) inspector general. According to a news report in the Washington Post, the HUD report found the board ruled on only 94 cases since October 2008. The FHA program involves 12,641 lenders, which leads HUD to question if the board is able to catch potential abuses. Since October, the board has taken action against nine lenders: Three were placed on probation, two were temporarily suspended from working with FHA and four were barred from the FHA programs. The report spurred Sen. Charles E. Grassley, R-Iowa, to issue a statement questioning FHA's fraud-detection abilities. ‘Tax dollars are at risk because this board is a toothless tiger,’ said Grassley. ‘It's not visible and moves slowly.’ SOURCE: Washington Pos

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