Perhaps the most noteworthy aspects of the Federal Housing Administration’s (FHA) recent proposed updates to its lender certification requirements relate to the defect taxonomy, which FHA and the Department of Housing and Urban Development (HUD) referenced when directing lenders to buy back faulty loans during the financial crisis or filing suit against them.
Per the proposal, the nine current categories would comprise four “Severity Tiers” used in assessing individual loans with Tier 1 representing the most serious defects.
Find out more details about the proposed revisions.