Notice2024-12820
Credit Watch Termination Initiative Termination of Direct Endorsement (DE) Approval
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 12, 2024
Issuing agencies
Housing and Urban Development Department
Abstract
This notice advises of the cause and effect of termination of Direct Endorsement (DE) approval taken by HUD's Federal Housing Administration (FHA) against HUD-approved mortgagees through the FHA Credit Watch Termination Initiative. This notice includes a list of mortgagees that have had their DE Approval terminated.
Full Text
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<title>Federal Register, Volume 89 Issue 114 (Wednesday, June 12, 2024)</title>
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[Federal Register Volume 89, Number 114 (Wednesday, June 12, 2024)]
[Notices]
[Pages 49897-49898]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-12820]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6475-N-01]
Credit Watch Termination Initiative Termination of Direct
Endorsement (DE) Approval
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, Department of Housing and Urban Development (HUD).
ACTION: Notice.
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SUMMARY: This notice advises of the cause and effect of termination of
Direct Endorsement (DE) approval taken by HUD's Federal Housing
Administration (FHA) against HUD-approved mortgagees through the FHA
Credit Watch Termination Initiative. This notice includes a list of
mortgagees that have had their DE Approval terminated.
FOR FURTHER INFORMATION CONTACT: John Higgins, Director, Quality
Assurance Division, Office of Housing, Department of Housing and Urban
Development, 451 Seventh Street SW, Washington, DC 20410-8000;
telephone (202) 402-6730 (this is not a toll-free number). HUD welcomes
and is prepared to receive calls from individuals who are deaf or hard
of hearing, as well as individuals with speech or communication
disabilities. To learn more about how to make an accessible telephone
call, please visit <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>.
SUPPLEMENTARY INFORMATION: HUD has the authority to address
deficiencies in the performance of lenders' loans as provided in HUD's
mortgagee approval regulations at 24 CFR 202.3. On May 17, 1999, HUD
published a notice (64 FR 26769) on its procedures for terminating
Origination Approval Agreements with FHA lenders and placement of FHA
lenders on Credit Watch status (an evaluation period). In the notice,
HUD advised that it would publish in the Federal Register a list of
mortgagees that have had their Approval Agreements terminated. HUD
Handbook 4000.1 section V.E.3.a.iii outlines current procedures for
terminating Underwriting Authority of Direct Endorsement mortgagees.
Termination of Direct Endorsement Approval: HUD approval of a DE
mortgagee authorizes the mortgagee to underwrite single family mortgage
loans and submit them to FHA for insurance endorsement. The approval
may be terminated on the basis of poor performance of FHA-insured
mortgage loans underwritten by the mortgagee. The termination of a
mortgagee's DE Approval is separate and apart from any action taken by
HUD's Mortgagee Review Board under HUD regulations at 24 CFR part 25.
Cause: HUD regulations permit HUD to terminate the DE Approval of
any mortgagee having a default and claim rate for loans endorsed within
the preceding 24 months that exceeds 200 percent of the default and
claim rate within the geographic area served by a HUD field office, and
that exceeds the national default and claim rate for insured mortgages.
Effect: Termination of DE Approval precludes the mortgagee from
underwriting FHA-insured single-family mortgages within the HUD field
office jurisdiction(s) listed in this notice. Mortgagees authorized to
hold or service FHA-insured mortgages may continue to do so.
Loans that closed or were approved before the termination became
effective may be submitted for insurance endorsement. Approved loans
are those already underwritten and approved by a DE underwriter and
cases covered by a firm commitment issued by HUD. Cases at earlier
stages of processing cannot be submitted for insurance by the
terminated mortgagee; however, the cases may be transferred for
completion of processing and underwriting to
[[Page 49898]]
another mortgagee with DE Approval in that geographic area. Mortgagees
must continue to pay existing insurance premiums and meet all other
obligations associated with insured mortgages.
A terminated mortgagee may apply for reinstatement if their DE
Approval in the affected area or areas has been terminated for at least
six months and the mortgagee continues to be an approved mortgagee
meeting the requirements of 24 CFR 202.5, 202.6, 202.7, 202.10 and
202.12. The mortgagee's application for reinstatement must be in a
format prescribed by the Secretary and signed by the mortgagee. In
addition, the application must be accompanied by an independent
analysis of the terminated office's operations as well as its mortgage
production, specifically including the FHA-insured mortgages cited in
its termination notice. This independent analysis shall identify the
underlying cause for the mortgagee's high default and claim rate. The
analysis must be prepared by an independent Certified Public Accountant
(CPA) qualified to perform audits under Government Auditing Standards
as provided by the Government Accountability Office. The mortgagee must
also submit a written corrective action plan to address each of the
issues identified in the CPA's report, along with evidence that the
plan has been implemented. The application for reinstatement must be
submitted through the Lender Electronic Assessment Portal (LEAP). The
application must be accompanied by the CPA's report and the corrective
action plan.
Action: The following mortgagees have had their DE Approval
terminated by HUD:
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Mortgagee home office HUD office Termination Homeownership
Mortgagee name address jurisdiction effective date center
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Open Mortgage, LLC............ 5316 W Highway 290, Des Monies......... 5/20/2024 Denver.
Ste. 220, Austin, TX
78735-8923.
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Julia R. Gordon,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2024-12820 Filed 6-11-24; 8:45 am]
BILLING CODE 4210-67-P
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</html>Indexed from Federal Register on June 12, 2024.
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