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BasePoint introduces early payment default solution

National Mortgage Professional
Nov 07, 2007

NAMB condemns practice of circumventing FHA loan processMortgagePress.comFHA mortgage approval process The National Association of Mortgage Brokers has condemned the practice of soliciting unapproved Mortgage Brokers to offer Federal Housing Administration (FHA) loans, thus circumventing the FHA program's approval process for originators. "Circumventing the FHA approval process would allow unscreened participants to enter the program," said NAMB President George Hanzimanolis. "NAMB stands behind licensing, criminal background checks, professional education and other reasonable measures that evaluate participants in the FHA program while keeping access to FHA loans available to consumers who need them." This type of third-party origination of FHA loans typically involves an FHA-approved lender paying the unqualified Mortgage Broker a fee outside the closing process to bring the FHA loans to them for processing. "This loophole needs to be closed as part of FHA reform," said Hanzimanolis. "NAMB has been a vocal advocate for modernizing the FHA loan program, and we will continue to seek sensible changes that benefit consumers." For example, FHA's annual audit and net-worth requirements for Mortgage Brokers are often time-consuming and cost-prohibitive. These barriers often discourage or prevent many mortgage brokers from participating in the program. NAMB supports reforming the FHA program, so that more mortgage brokers can participate, thus expanding consumer choice. Specifically, NAMB recommends replacing current audit and net-worth requirements with an annual FHA-required surety bond. When coupled with existing state-licensing requirements, a surety bond would maintain accountability, while removing obstacles that discourage Mortgage Brokers from participating in the FHA loan program. For more information, visit www.namb.org.
Published
Nov 07, 2007
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