HUD Proposes Indemnification Process for Faulty Loans Originated Under FHA Lender Insurance Program
October 14, 2010
The Department of Housing and Urban Development late last week announced a proposal for strengthened authority to coerce certain lenders into indemnifying the FHA for losses on insurance claims paid on mortgages that did not meet the agency’s guidelines. The proposal applies mostly to loans originated under HUD’s Lender Insurance. HUD would have the authority to force these FHA lenders to reimburse the government for committing “serious and material” violations of FHA origination requirements “such that