WASHINGTON - In a move designed to curb predatory lending and increase accountability in its mortgage insurance programs, the U.S. Department of Housing and Urban Development (HUD) passed a final rule July 20 that makes lenders accountable for appraisals on mortgages insured by the Federal Housing Administration (FHA). The rule was published in the July 20 Federal Register and is effective Aug. 19, 2004. "Lender Accountability for Appraisals" makes lenders accountable for the quality of appraisals performed by the appraisers the lender hires. In a prepared release from HUD, the agency said the rule is part of its ongoing effort to curb predatory lending and "will help assure that homebuyers will receive accurate statements of appraised values on homes they purchase using FHA mortgage insurance." The rule specifies that lenders that submit appraisals to HUD that don't meet FHA requirements can be subject to sanctions imposed by HUD's Mortgage Review Board. The new rule applies to both sponsor lenders who underwrite loans and loan correspondents who originate loans on behalf of their sponsors.
New HUD Rule Makes Lenders Responsible for Appraisals
Want the latest credit union news?
Sign up for our free newsletter today! All the breaking credit union news and information you need to make the right decision for your credit union delivered to your inbox. For free!
Thanks for subscribing, you will start receiving the Daily News Alert tomorrow!