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FHA Risk Management Initiatives: Reducing Mortgage Insurance Claims and Loss

Clint Rockwell and Melissa Klimkiewicz presented a West LegalEdcenter webinar, "FHA Risk Management Initiatives: Reducing Mortgage Insurance Claims and Loss," on August 25, 2010.

The Department of Housing and Urban Development (HUD) is considering three proposed initiatives that will contribute to the restoration of the Mutual Mortgage Insurance Fund (MMIF) capital reserve account, which HUD is responsible for under the National Housing Act. The changes are designed to preserve both the historical role of the Federal Housing Administration (FHA) in providing a home financing vehicle during periods of economic volatility and HUD’s social mission of helping underserved borrowers. FHA proposes to tighten only those portions of its underwriting guidelines that have been found to present an excessive level of risk to both homeowners and FHA.

This webcast explored these proposed changes, which include:

  • A cap on “seller concessions” to minimize FHA exposure to the risk of adverse selection
  • Introduction of a credit score threshold and reduction of the maximum loan-to-value for borrowers with lower credit scores
  • Tighten underwriting standards for mortgage loan transactions that are manually underwritten

Please click here for more information abouit this West LegalEdcenter webinar.

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