This waiver will help community banks remain as HUD-approved mortgagees providing FHA mortgages and home improvement loans, which will help the recovering housing market.
Washington, D.C. (PRWEB) January 04, 2013
The Independent Community Bankers of America (ICBA) welcomes a recently released Department of Housing and Urban Development (HUD) policy exempting small community banks from Federal Housing Administration (FHA) paperwork burdens. The new HUD update eliminates a regulatory mandate requiring small FHA lenders to submit internal control and compliance reports completed by an outside auditor.
“ICBA is pleased that the FHA has eliminated this costly compliance audit for small community banks, which will help them to continue serving their Main Street communities,” ICBA Vice President of Mortgage Finance Policy Ron Haynie said. “This waiver will help community banks remain as HUD-approved mortgagees providing FHA mortgages and home improvement loans, which will help the recovering housing market.”
The policy, detailed in HUD’s Mortgagee Letter 2012-29 from Dec. 21, immediately exempts small supervised lenders from internal control and compliance reporting requirements. Previously released HUD policies have allowed these institutions to submit unaudited regulatory reports to the FHA in place of audited financial statements, but did not eliminate the internal control and compliance reporting mandate. The new policy removes that requirement.
ICBA has worked closely with HUD/FHA, and members of Congress to address community banker concerns with the reporting requirement, which would have required many community banks to spend tens of thousands of dollars to maintain their status in the FHA program. Eliminating this reporting mandate ensures continued access of community banks and their borrowers to these critical housing programs.
The Independent Community Bankers of America®, the nation’s voice for nearly 7,000 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit http://www.icba.org.
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