The Federal Housing Administration's push to implement a risk-based premium system by Jan. 2 is not going to be easy for lenders or vendors, according to a regulatory compliance and software design consultant.FHA mortgage insurance premiums would be based on the downpayment, the credit score, and the source of the downpayment, which is a "very complicated change," Lance Richmond told MortgageWire. "On the software side, it definitely is a lot of work" and "vendors just can't respond that quickly to a major change like this," Mr. Richmond said. The mortgage consultant for Bellevue, Wash.-based Netupdate also pointed out that risk-based premiums are going to make it more difficult for subprime borrowers to qualify for FHA loans. "We need to get the word to HUD that this isn't the time to do it," Mr. Richmond said. The public comment period on the Department of Housing and Urban Development's FHA risk-based premium proposal ends Oct. 22. Mr. Richmond is a member of the Mortgage Bankers Association's compliance and legal issues committee. Netupdate can be found online at http://www.netupdate.com.

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