Carol Galante has a challenge: Spur lenders to take more care when originating Federal Housing Administration loans, without scaring them away or causing them to hike pricing to cover the additional risk.

When lenders first heard in early March about the FHA's initiative to revamp its approach to evaluating loan quality, it stirred a lot of apprehension. Quality control can result in penalties when loans don’t meet the agency's standards, and lenders are naturally wary of any changes. Some industry participants fear the new loan review process might penalize them for petty technicalities.

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