The Mortgage Bankers Association (MBA) is raising concerns over an Obama administration fiscal year 2015 budget proposal that would charge lenders an administrative fee to fund an enhanced quality assurance (QA) program for the Federal Housing Administration (FHA) single-family loan program. The administrative fee is estimated to generate $30 million annually to run the program.
In a March 24 letter, MBA Chairman E.J. Burke wrote to Secretary of the Department of Housing and Urban Development (HUD) Shaun Donovan that "imposing $30 million lender fees is premature without FHA first articulating a clear and comprehensive plan on the development, administration and use of the funds."
Burke wrote that his group shares HUD's goal to improve FHA's quality-assurance process and believes "dishonest or sloppy lenders have no place within the FHA program."
The letter notes that "MBA supports HUD evaluating its quality-assurance process by first defining what constitutes a manufacturing defect, then by determining defect severity and acceptable tolerances, and finally by establishing appropriate remedies (which may or may...