The trade group for mortgage brokers said a Department of Housing and Urban Development proposal goes "too far" in transferring all supervision of brokers to Federal Housing Administration-approved lenders.
The National Association of Mortgage Brokers wants HUD to continue setting standards for loan correspondents and to start sharing oversight responsibilities with FHA-approved lenders that chose to sponsor brokers.
"NAMB respectfully recommends that HUD revise the proposed rule and provide for a more balanced, dual oversight of loan correspondents," the trade group's president, Jim Pair, said in a Dec. 30 comment letter on the FHA proposal.
To conserve resources, HUD wants to stop dealing directly with brokers and focus its attention on FHA lenders that buy loans from brokers. Under the HUD proposal, FHA-approved lenders would be totally responsible for the quality and performance of broker loans. The brokers want to remain connected to the FHA in some way — along with keeping their authority to obtain case numbers for FHA loans.
"The inability to communicate with FHA or access FHA Web sites will pose serious issues for loan correspondents attempting to determine whether a borrower is eligible for FHA financing," Pair said in his comment letter.