The Federal Housing Administration updated its lender certification proposal originally issued
The revisions were posted in the Federal Register on Aug. 14 for a new 30-day comment period. The Department of Housing and Urban Development removed one broad provision in the initial proposal in response to industry comments.
"They narrowed and simplified the certification in a way that makes it easier for a lender to give," said Laurence Platt, an attorney with Mayer Brown.
It removed from the May version a broader statement regarding lenders certifying compliance with all HUD requirements needed to maintain FHA approval.
But HUD/FHA kept a provision that the company and the person signing the certification were not subject to some sort of sanction or enforcement action.
"It gives a little more clarity to the industry as to what the expectations are" from the agency, said Marx Sterbcow, an attorney who handles compliance issues.
The lender certifications are the linchpin for federal government enforcement of the False Claims Act, and while there might be more work needed to bring back the bank lenders that
"This is a vitally important step in HUD's efforts to create an environment in which lenders can operate with clarity and certainty regarding both FHA's requirements and potential penalties for noncompliance," Bob Broeksmit, president of the Mortgage Bankers Association, said in a press release.
"We look forward to working with HUD on additional efforts to ensure a robust and safe FHA for borrowers, lenders, and taxpayers," Broeksmit continued. "These initiatives are critical to restoring more active participation in the FHA program from all types of lenders in order to serve first-time and low-to-moderate income homebuyers."
