HUD Proposes Tighter Rules to Recoup Losses from FHA Lenders

HUD is recommending new regulations which would strengthen its authority to force lenders to indemnify or reimburse the Federal Housing Administration (FHA) for insurance claims paid on mortgages that don’t meet the agency’s underwriting guidelines.

HUD says its proposed rule would also require all new and existing lenders with the ability to insure mortgages on HUD’s behalf to meet stricter performance standards to gain and maintain their approval status.

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