Federal Housing Administration: Continuation of FHA Reform; Strengthening Risk Management Through Responsible FHA-Approved Lenders
This final rule adopts changes pertaining to the approval of mortgage lenders by the Federal Housing Administration (FHA) that are designed to strengthen FHA by improving its management of risk. This final rule increases the net worth requirement for FHA-approved mortgagees. The increase, the first since 1993, is adopted to ensure that FHA-approved mortgagees are sufficiently capitalized for the financial transactions occurring, and concomitant risks present, in today's economy. This final rule also provides for elimination of the FHA approval process for loan correspondents. Loan correspondents will no longer be approved participants in FHA programs. Loan correspondents, however, will continue to have the opportunity to participate in FHA programs as third-party originators (TPOs) through sponsorship by FHA-approved mortgagees, as is currently the case, or through application to be approved as an FHA-approved mortgagee. In eliminating FHA's approval of loan correspondents, FHA-approved mortgagees assume full responsibility to ensure that a sponsored loan correspondent adheres to FHA's loan origination and processing requirements. Finally, this final rule updates FHA's regulations to incorporate criteria specified in the Helping Families Save Their Homes Act of 2009 (HFSH Act) designed to ensure that only entities of integrity are involved in the origination of FHA-insured loans.
Homeless Emergency Assistance and Rapid Transition to Housing: Defining “Homeless”
This rule commences HUD's regulatory implementation of the Homeless Emergency Assistance and Rapid Transition to Housing Act of 2009 (HEARTH Act), enacted into law on May 20, 2009. The HEARTH Act consolidates three of the separate homeless assistance programs administered by HUD under the McKinney-Vento Homeless Assistance Act into a single grant program and creates the Emergency Solutions Grant Program and the Rural Housing Stability Program. The HEARTH Act also codifies in statutory law the Continuum of Care planning process, long a part of HUD's application process to assist homeless persons by providing greater coordination in responding to their needs. The HEARTH Act defines the terms ``homeless,'' ``homeless individual,'' ``homeless person,'' and ``homeless individual with a disability,'' but these definitions contain terms that require further elaboration. Since the scope of these terms is essential to the development of an appropriate regulatory structure for the homeless assistance programs as consolidated and amended by the HEARTH Act, HUD is initiating the