Industry
As Carl kindly put it when we proposed this topic, he plans to watch paint dry instead of reading this in any detail! But heading into year end and audit season, lenders need to plan for this important issue.
HUD Net Worth Calculations
This summer, HUD’s Office of Inspector General released an updated version of Chapter 7 of the HUD Audit Guide and a Mortgage Letter outlining significant changes to unacceptable assets. These changes apply to all approved FHA lenders and any lenders applying for FHA approval, the most significant of which include:
HUD requires all FHA approved lenders to comply by December 31, 2021, while the changes are effective immediately for lenders applying for FHA approval.
According to the Mortgagee Letter, lenders who are impacted by the changes to FHA’s Unacceptable Assets (i.e.: dropping below minimum net worth requirements) must submit a Notice of Material Event in LEAP within 30 business days of the deficiency and a Corrective Action Plan documenting the planned actions to be taken by the lender to ensure compliance by December 31, 2021.
Proposed GNMA Changes
Additionally, this summer Ginnie Mae (GNMA) released proposed changes to their capital and liquidity requirements. These are only proposed changes and have not yet been approved or enacted. The most significant of those changes are as follows:
The full release from GNMA can be found here:
https://www.ginniemae.gov/newsroom/publications/Documents/Financial%20Requirements%20RFI_v2.pdf