Acting FHA commissioner Carol Galante believes that “it has never been more important that lenders doing business with FHA apply our standards to each and every loan.” To make sure that starts happening, she has announced sanctions against 240 FHA-approved lenders, including “reprimands, probations, suspensions and civil money penalties” as well as license revocation in some instances[1]. In some cases, the revocations are temporary, but in cases like that of Florida’s 1st Continental Mortgage, the licenses are being permanently withdrawn[2]. Galante hopes that strictly enforcing the FHA requirements will help “stabilize entire neighborhoods and communities.”
The FHA’s Mortgage Review Board has taken aggressive action against lenders believed to be in violation of FHA requirements in the past two years, last year reaching a record high of 1,600 administrative actions. Do you think that this is a good thing, or is it just making the market more uncertain?
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[1] http://www.dsnews.com/articles/fha-announces-sanctions-against-240-lenders-2011-07-29
[2] http://www.gpo.gov/fdsys/pkg/FR-2011-07-29/pdf/2011-19293.pdf
