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Excerpt from "Federal Issues"

HUD Solicits Input Regarding Warehouse Lending Structures. On November 16, HUD posted a notice on its website soliciting comments regarding changes in warehouse lending structures that have occurred since HUD’s previous regulations on table funding and secondary market transactions were issued in 1994. The notice seeks input from the industry regarding warehouse lending structures, processes and procedures in order for HUD to determine whether it needs to provide additional guidance regarding the scope of RESPA as it applies to current mortgage funding practices. The specific questions include, among other things: (i) how a warehouse lender funds loan originators; (ii) how a warehouse lender assures repayment by the loan originator; (iii) whether a loan originated by a loan originator ever transfers to the warehouse lender, and if so, whether the loan originators are ever obligated to repurchase the loan; (iv) the extent to which a warehouse lender is involved in the credit approval decision; and (v) the characteristics that distinguish a bona fide transfer of the loan that make it a secondary market transaction. Comments will be due not later than 30 days after the notice is published in the Federal Register, which is still pending.

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