FHA: Brokers Should Hold Off on Audits

The Federal Housing Administration is advising mortgage brokers to hold off on getting their annual financial audits until they see a final rule that will change the net worth requirements for lenders and brokers. "I would strongly encourage you to wait until you see the rule," FHA commissioner David Stevens told a National Association of Mortgage Brokers conference in Washington. On Monday, comments made by a top FHA official were incorrectly interpreted as a signal that brokers should file their audits by March 31. Mr. Stevens told National Mortgage News Online that the final rule is coming out very soon and an audit can cost a small broker $8,000 to $10,000. "Before they spend that money," he said, "they should wait until the rule comes out just to make sure they actually need one." The FHA commissioner told the NAMB meeting he cannot discuss the contents of the final rule. But he was able to get the FHA general counsel to grant permission for him to advise brokers on filing financial audits. The original proposed rule eliminates the need for brokers to meet FHA audit and net worth requirements. Going forward, FHA-approved direct endorsement lenders will be responsible for the brokers they work with and policing the quality of their loans.