Underwriting and processing centers that handle Federal Housing Administration-insured loans will soon need to be registered as branches.
The U.S. Department of Housing and Urban Development recently released a mortgagee letter to provide guidance on certain provisions in Handbook 4060.1 REV-2, which was issued on Aug. 14, 2006.
HUD said it has delayed the requirement, in paragraphs 5-3 and 5-5 of the handbook, for underwriting and processing centers to be registered as branch offices because it has yet to enable its data systems to collect the information. Mortgagees will be notified when the system modifications are complete, according to the letter.
The handbook specifically states that an approved Direct Endorsement mortgagee "may perform underwriting functions in any of its registered branch locations for any loan application where the mortgagee is identified as the originator, sponsor, authorized agent or principal for the subject loan in the FHA Connection."
Additionally, "processing and/or underwriting functions may be centralized in any office(s) of the mortgagee or performed at each office of the mortgagee," the handbook states. "All centralized locations must be registered branches of the mortgagee."
Among other things, the letter also reminded that non-FHA approved mortgage brokers can participate in the origination of home equity conversion mortgages.