The FHA has announced a number of policy changes “to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.”

The FHA said it would take the following steps:

  • Increase the mortgage insurance premium (MIP);
  • Update the combination of FICO scores and down payments for new borrowers;
  • Reduce allowable seller concessions from 6% to 3%;
  • Implement a series of significant measures aimed at increasing lender enforcement.

Of particular note is the reduction by half of allowable seller concessions and the increased enforcement on FHA lenders, including:

  • Posting lender performance rankings on the HUD website
  • Increased scrutiny of lender performance and compliance with FHA guidelines and standards
  • Enforcement of indemnification provisions for lenders using delegated insuring process
  • Requirement that all approved mortgagees assume liability for all of the loans that they originate and underwrite
  • Authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches


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