Brokers Turning to FHA for Loans

Despite what the National Association of Mortgage Brokers says are unnecessary barriers that keep some members from originating FHA-insured mortgages, brokers now account for a third of the Federal Housing Administration's production, according to FHA Commissioner Brian Montgomery.Speaking to the NAMB's delegate council June 22 at the group's annual convention in Seattle, Mr. Montgomery said there has been a 25% increase so far in fiscal year 2007 in the number of brokers approved to write FHA loans. He called the increase a "great sign" and a said it is a trend he hoped would continue. "We want to see broker participation grow," he told the council, which consists of the group's executive leadership plus two representatives from each state affiliate. To earn approval to make FHA loans, brokers must post a $75,000 bond plus agree to yearly audits. But the NAMB believes the audit requirement is too onerous and "too expensive" for small firms that don't do many loans. For the government's part, the FHA commissioner said his agency is "working hard" to expand its direct endorsement program "to allow highly qualified FHA-approved lenders to use non-FHA-approved mortgage brokers. That's "how it's done in the rest of the industry right now," he said.