Mortgage Loan Compliance | FHA Monitoring Excessive Fees

A conference call was hosted by the FHA to summarize new regulatory changes regarding loan correspondents and net worth requirements that took effect in May. Although the agency has been "very responsive" to questions about the new regulations, including the issuance of two separate mortgage letters offering guidance about how to comply with the changes lenders and brokers are still flooding the government with questions.

The Federal Housing Administration is closely monitoring all fees charged by mortgage brokers and other third-party originators who are sponsored by FHA-approved lenders, agency officials said during an unusual industry conference call last week.

The officials said they will examine closely fees charged by all FHA-approved lenders and TPOs, and will question lenders about those which do not appear to be reasonable and customary for that particular geographic area. They also said lenders will be held accountable for any fees found to be either bogus or excessive.

FHA officials on the call said they plan to issue a third mortgagee letter, hopefully by mid-August and with a mid-September effective date, to address industry concerns. Among other things, that letter is expected to cover entering TPO information into the FHA Connection system. Meanwhile, participants were told during the discussion that TPO employees could be paid either on a W-2 or 1099 basis under the new rules, and that TPOs could even have dual employment status, acting as both a real estate agent and a loan broker. But as it did in a previous mortgagee letter, the government warned lenders to be certain their TPOs comply with state laws.

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