To the Point with Bob: Reducing False Claims Act Risk in FHA Lending

Bob Broeksmit, CMB

In the latest entry of his blog series, To the Point with Bob, Mortgage Bankers Association President and CEO Bob Broeksmit, CMB, discusses HUD’s efforts to improve the FHA loan review process, as well as MBA’s advocacy to support those efforts.

Broeksmit notes improvements to FHA’s defect taxonomy–the method used to identify defects at the loan level and the remedies for such shortcomings–represent a positive development, particularly for first-time homebuyers and low- and moderate-income borrowers. These changes are part of a larger effort by HUD to revise the loan review process and simplify the certifications that lenders make in connection with the FHA program in order to reduce the risk of False Claims Act enforcement for immaterial loan origination errors.

“MBA has championed reforming the taxonomy for some time,” Broeksmit writes. “Our posture has been that FHA does not need new rules and regulations to govern our industry, but rather more clarity and transparency in the ones that are already on the books.”

To read the entire blog, as well as past entries, click