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HUD views quality control
as an important responsibility of lenders. It imposes
many requirements on lenders who wish to take
advantage of the FHA-insured, single-family mortgage
program.
As
a condition of FHA-approval, lenders—including
loan correspondents—must implement
a written quality control plan. They submit
a copy of the plan when applying for FHA approval,
but the responsibility doesn't stop there.
To maintain their FHA approval they must continuously
revise the plan as needed due to changes in federal
law, HUD regulations, handbooks or mortgagee letters
or other guidelines to keep it up-to-date. Lenders
that service loans must have a QC plan for FHA servicing.
A
lender’s quality
control plan be must be designed to assure compliance
with HUD's origination or servicing requirements throughout
its operations as well as with the lender’s own
requirements. It must protect the lender and HUD from
unacceptable risk. It must guard against errors, omissions
and fraud and must assure swift and appropriate corrective
action. Failure to comply with specific FHA quality control
requirements can result in sanctions and civil money
penalties imposed by the HUD’s mortgagee review
board.
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