The Rural Housing Service is tightening its indemnification policies to improve compliance with its lending guidelines.
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"It will put the burden of making good loans on the originator," said RHS administrator Tammye Trevino.
RHS issued a proposed rule back in May and the agency plans to publish a final rule in February.
Under the new rule, agency officials will review all single-family guaranteed loans that go into loss mitigation, the RHS administrator said in an interview.
"We will go back and do another review on whoever originated that loan," Trevino said.
RHS has always reviewed claims submitted by servicers. "If you make a mistake, you can pay for it. They will reduce your loss claim," one lender said.
