Small Mortgage Bankers May Be Hurt by FHA Net Worth Change

The net worth requirement changes proposed to the Federal Housing Administration program could end up hurting small mortgage bankers, said National Association of Mortgage Brokers president Jim Pair. The higher requirement could force small mortgage banking firms to leave the FHA program, which in turn will limit consumer choice, said the trade group chief. As a result, only large lenders — more than anybody else — will benefit from this change, he said. As for removing the need for mortgage brokers to receive FHA approval, Mr. Pair said, "This is good and this is bad in some cases. The devil is in the details." He said NAMB is concerned about FHA adopting a similar policy regarding the ordering of appraisals as mandated by the Home Valuation Code of Conduct. NAMB is trying to set up a meeting with FHA to see if the agency will revise its stance. Mr. Pair spoke at the annual convention of the New York Association of Mortgage Brokers in Melville, N.Y.