MBA Asks Clarifications on FHA Handbook
The Mortgage Bankers Association submitted a letter yesterday to the Federal Housing Administration, asking for clarifications on more than 40 questions in provisions of the new FHA Handbook.
The letter (http://mba-pac.informz.net/mba-pac/data/images/FHA Letter – Handbook Clarifications.pdf) also encourages HUD to implement a temporary “good faith” implementation and enforcement period for the policies in question; this temporary period would be similar to the Consumer Financial Protection Bureau’s consideration of lenders’ good faith efforts to comply with the new TILA/RESPA Integrated Disclosure rule, by examining lender compliance through corrective and diagnostic supervision until clarified guidance is published.
The letter noted creation of the new Single-Family Housing Policy Handbook, which combines thousands of FHA policies into a single document, will result in a benefit for lenders to ensure compliance with FHA program guidelines. However, MBA pointed out that “many outstanding policies that still require clarification for lenders to originate FHA loans with confidence.”
MBA has been working with a cross-section of diverse lenders to identify the most common questions. It submitted 43 requests for clarification.
“Clarity in Handbook guidelines is critical to ensure compliance and to preserve access to FHA mortgage credit,” wrote MBA Senior Vice President for Public Policy and Industry Relations Steve O’Connor. “If provisions in the Handbook remain unclear, lenders will be forced to assess their ability to assume the risk of originating FHA loans that implicate these unclear provisions.”
MBA encouraged HUD to implement a temporary “good faith” implementation and enforcement period of the policies in question, similar to the CFPB’s consideration of lenders’ good faith efforts to comply with the new TRID rule. “MBA urges HUD to take the same approach, by examining lender compliance through corrective and diagnostic supervision until clarified guidance is published,” O’Connor wrote.
To facilitate helpful and productive conversations between lenders and FHA, MBA also requested a meeting with FHA to provide a status update on the current implementation of Handbook guidance and to discuss provisions that require additional clarity.
