Jul 18, 2013

FHA insured mortgages could come under the review for the foreclosure processes

According to the Housing Wire, Patton Boggs of the Washington Advisory said that the Mortgage Review Board of the Department of Housing and Urban Development could review the FHA insured mortgages due to the foreclosure furor. This came in the wake of many banks in the U.S. suspending their foreclosure process after allegations of improper documentation and illegal affidavit signing were disclosed. Attorneys general in all 50 states have initiated their own reviews of the foreclosure procedures of mortgage servicers.

The Mortgage Review Board can sanction, suspend or even terminate lenders and servicers that are found to have erred during a foreclosure on a FHA-insured mortgage. Patton Boggs said the board also has the authority to assess and collect penalties from the perpetrators for violations of HUD regulations and guidance.

Just another indication that originators need to be careful about what kind of loans they are working on. Gordon Gecko did say "Greed is good" - but I am sure he would have qualified it had we asked him to talk about it in the context of the FHA mortgages.

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