In an announcement today, FHA is going to update regulations to strengthen the financial outlook of the agency:
"These new regulations strengthen the process by which FHA requires certain lenders to indemnify the U.S. Department of Housing and Urban Development (HUD) for insurance claims paid on mortgages that are found not to meet the agency's guidelines. In addition, the final rule requires all lenders with the authority to insure mortgages on HUD’s behalf ("Lender Insurance" mortgagee) to meet stricter performance standards to gain and maintain their approval status..."
Further in the announcement the regulations discussed fraud, fraud detection, and having lenders be responsible for such fraud. I completely support that idea, but in the past 12 months FHA, Fannie Mae, and Freddie Mac have been able to find what they call fraud on a majority of the files that they own or insure.
I wonder if this is just a way to push unwanted debt onto the banks. If that is the case, the lending world just got a lot smaller.