Brokers Don't Need an Audit for FHA

Mortgage brokers will no longer have to go through the expense of an audit to originate Federal Housing Administration loans. For the rest of this year, they can coast without paying a certified public accountant to verify their net worth. "Mortgage brokers already approved by FHA will be authorized to continue to originate FHA-insured loans through the end of the calendar year." Starting January 1, brokers will have to team up with FHA-approved direct endorsement lenders to originate FHA-insured single-family loans. These changes are all part of a long-awaited final rule that eliminates Federal Housing Administration's approval process for mortgage brokers. After three years, HUD will raise the net worth requirements again. Beginning May 20, 2013, "approved lenders and applicants to FHA single-family program must have a net worth of $1 million plus 1% of total loan volume in excess of $25 million," the final rule says. The final rule caps the maximum worth requirement at $2.5 million. HUD originally proposed a $2.5 million net worth for all FHA-approved lenders. (See related story.)