Federal Housing Administration Commissioner David H. Stevens today announced plans to implement a set of credit policy changes that will enhance the agency's risk management functions, including the FHA's first-ever chief risk officer.
The actions come as the agency braces itself for a congressional study that's expected to show the FHA's capital reserve ratio dropping below the 2% congressionally-mandated minimum.
The changes include tighter rules for appraisals and institutions that wish to do business with the FHA, and will be effective Jan. 1.
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Supervised mortgagees must submit audited annual financial statements under the new rules. Additionally, lenders seeking to originate, underwrite, or service FHA loans must meet the criteria for a supervised or nonsupervised mortgagee, which includes assuming liability for all the loans they originate or underwrite. Net worth requirements for mortgagees would also increase to at least $1,000,000.
The FHA said the policies put it in line with other GSEs and investors.
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