24 C.F.R. § 203.4 Approval of mortgagees for Lender Insurance.
Title 24 - Housing and Urban Development
Each mortgagee that chooses to participate in the Lender Insurance program must use the Lender Insurance process to insure all of the mortgages that it underwrites, unless the mortgages are ineligible for the Direct Endorsement program as provided in §203.5(b), or unless HUD determines that the mortgages are ineligible for the Lender Insurance program. (a) Direct Endorsement approval. To be approved for the Lender Insurance program described in §203.6, a mortgagee must be unconditionally approved for the Direct Endorsement program as provided in §203.5. (b) Performance: Claim and default rates. In addition to being unconditionally approved for the Direct Endorsement program, a mortgagee must have had an acceptable claim and default record for at least 2 years prior to its application for participation in the Lender Insurance program. HUD determines acceptable claim and default record as follows: (1) A mortgagee is eligible for the Lender Insurance program if its claim and default rate is at or below 150 percent of the national average rate for all insured mortgages. (2) A mortgagee that operates in a single State (Single State mortgagee) may choose to have its claim and default rate compared with the average rate in the State in which it operates, in which case the Single State mortgagee is eligible for the Lender Insurance program if its claim and default rate is at or below 150 percent of the State average rate for insured mortgages. (c) Annual review. HUD will monitor a mortgagee's eligibility to participate in the Lender Insurance program on a yearly basis. (d) Termination of approval. If a mortgagee that has been approved by HUD for the Lender Insurance program violates the requirements and procedures established by the Secretary for such program, or if HUD determines that other good cause exists (including, but not limited to, HUD's determination that the mortgagee is not using prudent review techniques), HUD may immediately terminate the mortgagee's approval to participate in the Lender Insurance program, in accordance with section 256(d) of the National Housing Act (12 U.S.C. 1715z–21(d)). Within 30 days after receiving HUD's notice of termination, a mortgagee may request an informal conference with the Deputy Assistant Secretary for Single Family Housing. The conference will be conducted within 30 days after HUD receives a timely request for the conference. After the conference, the Deputy Assistant Secretary may decide to affirm the termination action or to reinstate the mortgagee's Lender Insurance program approval. The decision will be communicated to the mortgagee in writing and will be deemed a final agency action. Termination of an origination approval agreement under part 202 of this chapter or termination of Direct Endorsement approval under §203.3(d)(2) for a mortgagee or one or more branch offices automatically terminates Lender Insurance approval for the mortgagee or the branch office or offices without any further requirement to comply with this paragraph. [62 FR 30226, June 2, 1997, as amended at 62 FR 65182, Dec. 10, 1997]
Title 24: Housing and Urban Development
PART 203—SINGLE FAMILY MORTGAGE INSURANCE
Subpart A—Eligibility Requirements and Underwriting Procedures
Direct Endorsement, Lender Insurance, and Commitments
§ 203.4 Approval of mortgagees for Lender Insurance.
