InfoBytes Special Alert: FHA Revises Requirements for Obtaining, Maintaining, and Utilizing an Entity's FHA Lender Approval

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The Federal Housing Administration (FHA) of the U.S. Department of Housing and Urban Development (HUD) recently issued Mortgagee Letter 2011-34 to announce revisions to FHA's requirements for obtaining, maintaining, and utilizing an entity's lender approval... All changes set forth in the Mortgagee Letter became effective immediately.

Following is a summary of Mortgagee Letter 2011-34's revisions to FHA's lender approval and operational requirements:

• Single Family Loan Origination Lending Area. The single family origination lending area (also known as the Area Approved for Business or AAFB) for approved mortgagees now includes all HUD field office jurisdictions, subject to lenders meeting each state's origination requirements. For purposes of any Credit Watch Terminations, the AAFB will be maintained at the HUD field office jurisdiction level. This change eliminates the geographical restrictions previously imposed upon approved lenders, which limited an approved lender's FHA origination activity to the designated lending areas for each home office and registered branch office.

• Office Facilities. HUD no longer has approval requirements for a lender's branch office facilities, including traditional, non-traditional and direct lending branch offices. Loan origination and/or servicing activities may be conducted from an approved mortgagee's home office, branch office, and/or direct lending branch office. However, all office facilities, regardless of type, must fully comply with all state licensing requirements in effect in the jurisdiction in which the office facility is located.

Please see full special alert below for more information.

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Published In: Administrative Agency Updates, General Business Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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