Get The SCOOP! Blog by® Refinance or Apply For A Mortgage Online

FHA Eliminates Two Unnecessary and Outdated Lending Roadblocks

March 15th, 2019 9:07 AM by Jackie A. Graves


Makes good on promise to streamline procedures

The Federal Housing Administration has taken steps to reduce some of the regulatory burdens that belabor the lending process, releasing two mortgagee letters Tuesday with updated guidelines on home warranty and inspection requirements for single-family FHA loans.

Mortgagee Letter 2019-04 eliminates the FHA Inspector Roster in order to expand the pool of inspectors for lenders.

The FHA said industry standards and local regulations are sufficient enough to ensure inspector qualifications, making FHA’s standards redundant.

“There is no longer a need for HUD to maintain and administer its own standardization process for inspectors,” the mortgagee letter stated.

Mortgagee Letter 2019-05 streamlines guidelines for home warranties by eliminating the requirement that borrowers purchase 10-year protection plans for new construction homes, reducing expenses for the borrower.

The FHA said homebuyer and builder’s one-year Warranty of Completion of Construction provides enough assurance that the home was built properly and the borrower is protected.

Under the one-year warranty, the FHA said "the warrantor agrees to fix and pay for the defect and restore any component of the home damaged in fulfilling the terms and conditions of the warranty."

FHA Commissioner Brian Montgomery said in a LinkedIn post on Wednesday that the moves were part of an overall effort to enhance procedures to lenders.

“Shortly after arriving back at FHA in June 2018, I indicated one of our goals was to streamline and update our program guidelines and procedures,”

Montgomery wrote. “In parallel with the Administration’s objectives of reducing regulatory barriers, late yesterday we released two Single Family Mortgagee Letters (2019-04 and 2019-05) where we’ve eliminated two unnecessary and outdated regulations that have been barriers for lenders.”

Source: To view the original article click here

Posted by Jackie A. Graves on March 15th, 2019 9:07 AM


My Favorite Blogs:

Sites That Link to This Blog: