View Rule

FHA needs greater flexibility to improve management of program risks and reduce possible losses associated with poorly originated and underwritten mortgages. Currently, under the Credit Watch Termination Initiative, FHA compares the rate of early defaults and claims in a geographic area served by a HUD field office in which a specific mortgagee is authorized to originate and/or underwrite loans against the performance of all other mortgagees in the same geographic area. The explicit limitation of geographic review of a mortgagee’s performance in the current regulations does not provide FHA the ability to address mortgagees with systemic performance issues that would not meet reasonable de minimis thresholds in any one HUD field office jurisdiction. As a result, FHA will revise existing regulations to provide the Department the ability to target monitoring and enforcement actions to reflect current electronic origination and underwriting practices at various operational levels of both the mortgagee and FHA.