INDEX

Acquisition,

Between Approved Mortgagees 6-18(A)

By Non-approved Mortgagee 6-18(B)

Acronyms, List of See page iii of Forward

Additional Sponsors for a Loan Correspondent 5-16

Address

Mortgagee Address in FHA Records 1-15, 6-2,

Office of Lender Activities and Its Divisions.

See FAQs in FHA Connection

Administrative Actions & Sanctions, and Civil Money Penalties 1-13

Administrative Actions 8-4(C)(1)

Civil Money Penalities 8-4(C)(2)

Debarment or Suspension 8-4(B)

Limited Denial of Participation (LDP) 8-4(A)

Mortgagee Review Board (MRB) Actions 8-4(C)

Areas Approved for Business 2-19

Civil Money Penalties 1-14

Advertising, Misrepresentative 2-17

Annual Audit Requirements

Extensions 4-4(C)

Newly Approved Mortgagee 4-4(B)(5)

Nonsupervised Loan Correspondent 4-4(A)(2)

Nonsupervised Mortgagee 4-4(A)(1)

When Not Required 4-4(B)

Annual Audit, Review of LASS Submissions 4-5

Annual Renewal of FHA Approval

Annual Renewal Fees 4-3

Annual Submission of Audited Financial Statements 4-4

Failure to Comply 4-2

Summary of Requirements 4-1

Yearly Verification Report 4-2

Appeal

Disapproval of Initial Application 3-9

Notice of Withdrawal 4-9(C)

Application Form 1-1(A), 3-2(A)(3)

Application, Initial

Application Processing 3-4

Approval of Application 3-7

Disapproval of Application 3-8

Formal Notice of Initial Approval 3-12(D)

Required Documents 3-2

Application Fee 3-2(A)(2)

Application Form 11701 3-2(A)(3)

Credit Reports 3-2(A)(4)

Errors and Omissions Insurance 3-2(A)(11)

Evidence of Acceptable Facilities 3-2(A)(9)

Fidelity Bond 3-2(A)(10)

Financial Statements 3-2(A)(6)

Funding Program 3-2(A)(13)

Licensing 3-2(A)(7)

Quality Control Plan 3-2(A)(12)

Resumes 3-2(A)(5)

Sanctions Letter 3-2(A)(14)

Sponsor Cover Letter 3-2(A)(1)

State Approval of ôdbaö 3-2(A)(8)

Approval Requirements See Chapter 2

Business Form 2-2

Corporation 2-2(A)

Limited Liability Company 2-2(C)

Liquid Assets. 2-6

Mortgagee Name 2-4

Net Worth Requirements 2-5

Partnership 2-2(B)

State Licensing Requirements 2-3

Approvals

Direct Endorsement 1-1(A)

Multifamily Accelerated Processing 1-1-(B)

Newly Approved Mortgagees 3-11

Renewal of Mortgagee Approval 1-3

Types of Mortgagee Approvals 1-2

Voluntary Withdrawal of FHA Approval 6-25

Authorized Agent-Principal Relationship 5-9

Bankruptcy 6-24

Branch Office

Centralized Centers 5-5

Change of Address or Telephone Number 6-3

Direct Lending Branch 5-8

Manager 2-8

Mortgagees Permitted to Maintain Branch Offices 5-6

Originating at Branch Offices 5-2

Servicing by Branch Offices 5-4

Staffing 2-12(B)

Summary of Branch Office Requirements 5-1

Underwriting at Branch Offices 5-3

Business Form

Approval Requirements 2-2

Character of Business (Principal Activity), Change to 6-15

Charter, Change to. 6-14

Reporting Changes 6-1

Changes

Address and/or Telephone Number 6-2, 6-3

Bankruptcy or Liquidation 6-24

Character of Business (Principal Activity), Change to 6-15

Charter, Change to. 6-14

Control, Change in 6-13

Conversion of Mortgagee Type 6-16

dba 6-9

Errors and Omissions Insurance 6-20

Federal Taxpayer Identifying Number 6-14

Fidelity Bond, Termination 6-20

Fiscal Year 6-7

Legal Name 6-8

Liquid Assets Deficiency 6-22

Loss of Underwriter 6-10

Merger or Consolidation 6-17

Net Worth Deficiency 6-21

Operating Loss 6-23

Partnership, Change in 6-12

Reporting Changes 6-1

Requirement to Notify HUD of Changes Subsequent to Approval

2-24

Sale or Acquisition 6-18

Senior Officer 6-11

Shareholder, Ownership or Control 6-13

Termination of Supervision 6-19

Voluntary Withdrawal of FHA Approval 6-25

Civil Money Penalties 1-14 & 8-4(C)(2)

Compensation, Employees 2-9(A)

Conducting Mortgagee Business 2-9(F)

Contacting the Department 1-16

Control, Change in 6-13

Conversion of Mortgagee Type 6-6

Corporation, Approval Requirements 2-2(A)

Credit Watch Termination Initiative 8-5

Deficiency

Liquid Asset Requirement 6-22

Net Worth Requirement 6-21

Direct Endorsement (DE) Mortgagee 1-1(A), 3-13

Loss of Underwriter 6-10

Underwriting Area 2-19(C)

Documentation for Specific Business Forms 3-3

Doing Business As (dba) Name, Change of 6-9

Employee

Compensation 2-9(A)

Control and Supervision of Staff 2-9(D)

Employees and Officers 2-9

Employees 2-9(A)

Full Time, Part Time and Outside Employment 2-9(G)

Enabling Legislation See page i of Forward

Errors and Omissions Insurance 3-2(A)(11)

Escrow Funds 2-21

Evidence of Acceptable Facilities 3-2(A)(9)

Extension Requests of LASS Submissions 4-4(C)

Fair Housing and Other Federal Laws 2-16

Federal Taxpayer Identifying Number, Change to. 6-14

Fees

Annual Renewal Fee 4-3

Branch Registration 5-7(A)

Conversion of Mortgagee Type 6-16

Initial Application. 2-7

FHA Connection 1-5

FHA Monitoring Activities 8-1

On-site Reviews 8-2

Results and Referrals 8-3

Fidelity Bond

Requirement 3-2(A)(10)

Termination 6-20

Financial Statements

Annual Renewal 4-4

Initial Approval 3-2(A)(6)

Fiscal Year, Change of 6-7

Frequently Asked Questions 1-8

Funding Program 3-2(A)(13)

Geographic Restrictions for Loan Origination and Underwriting 2-19

Governmental Institutions, Additional Approval Requirements 2-31

Handbooks 1-8

Home Mortgage Disclosure Act of 1974 (HMDA) 1-12

Home Office

Change of Address or Telephone 6-2

Staffing 2-12(A)

HUDÆs Lender Web Page 1-4

HUDCLIPS 1-7

Ineligible Participants. 2-10

Information Requests, By FHA 4-10

Investing Mortgagee

Additional Approval Requirements 2-30

Conversion from 6-16(G)

Conversion to 6-16(F)

LASS Submissions 4-4

Acceptance of LASS Submission 4-6

Deficient LASS Submission 4-7

Extension Requests 4-4(C)

Rejected LASS Submission 4-8

Legal Name, Change of 6-8

Lender Approvals, Types of 1-2

Lender Lists on HUDÆs Web Site 1-9

Lender Operations

Examination by HUD 1-12

MortgageeÆs Address for Communication 1-16

Operating Expenses 2-8

Reports Submitted to FHA 1-12

Lending Area 2-19

Licenses 3-2(A)(7)

Limited Liability Company

Additional Documentation Required 3-3(B)

Approval Requirements 2-2(C)

Liquid Asset Requirement

Approval Requirements. 2-6

Deficiency 6-22

Renewal Requirement 4-5(A)(6)

Liquidation 6-24

Loan Officer 2-8

Loan Servicing Responsibility 2-20

Mergers 6-17

Approved Mortgagee and Non-approved Mortgagee 6-17(B)

Two Approved Mortgagees 6-17(A)

Misrepresentative Advertising 2-17

Mortgage Lender 1-1 & 1-2(B)

Mortgage Broker 1-1, 1-2(C) & 2-18

Mortgagee Identification Number 3-12(A)

Mortgagee Name

Approval Requirements 2-4

Change 6-8

Mortgagee

Mergers 6-17

Ownership, Change in 6-13

Sale or Acquisition 6-18

Types 1-2

Mortgagee Review Board (MRB) Actions 8-4(C)

Multifamily Accelerated Processing 1-1-(B)

Nationwide Branch (Direct Lending Branch) 5-8

Neighborhood Watch 8-6

Net Branching 2-14

Net Worth Requirement

Approval Requirements 2-5

Deficiency 6-21

Renewal Requirements 4-4(A)(1)(b), 4-4(A)(2)(b), 4-5(B)(5)

Nonsupervised Loan Correspondent

Additional Approval Requirements 2-29

Conversion to Nonsupervised Mortgagee 6-16(E)

Nonsupervised Mortgagees

Additional Approval Requirements 2-27

Conversion to Nonsupervised Loan Correspondent 6-16(D)

Not-for-profit Entity 3-3(C)

Notice of Violation 4-9(A)

Notice of Withdrawal û Termination of Approval 4-9(B)

Office Facilities

Direct Lending Branch Office 2-13(D)

Home office 2-13(A)

Nontraditional branch office 2-13(C)

Traditional branch office 2-13(B)

Officers 2-9(B)

Companies with Joint Officers 2-9(C)

OMB Approval of Information Collections 1-17

Operating Loss 6-23

Origination Lending Areas 2-19(A)&(B)

Outsourcing Mortgagee Operations 2-13

Ownership, Change in 6-13

Partnership

Additional Documentation Required 3-3(A)

Approval Requirements 2-2(B)

Change in 6-12

Performance Requirements of Lenders 1-10

Principal-Authorized Agent Relationship 5-10

Establishing the Relationship 5-14

Mortgagee Name in Loan Closing 5-13

Origination and Underwriting 5-12

Origination Fee 5-15

Principal 5-10

Termination 6-4

Prohibited

Branch Arrangements (including Net Branching) 2-14

Prohibited and Permissible Payments 2-22

Words in Mortgagee Name 2-4

Quality Control Plan

Adequate Scope and Sampling 7-3(F)

Affiliate Review 7-3(H)

as a Risk Assessment Tool 7-4

Basic Elements 7-3

File Retention 7-3(K)

General 7-1

Goal of Quality Control 7-2

Independence 7-3(B)

Notification to FHA 7-3(J)

Plan Form and Execution 7-3(A)

Qualified Staff 7-3(C)

Reporting and Corrective Action 7-3(I)

Requirements for Approval 2-23, 3-2(A)(12)

Restricted Participation 7-3(L)

Site Review 7-3(G)

System of Loan File Review 7-3(E)

Timeliness 7-3(D)

Quality Control for Multifamily Servicing 7-14

Quality Control for Single Family Origination

Conduct Prefunding Reviews 7-5(B)

Identify Patterns 7-5(C)

Monitor Application Process 7-5(A)

Quality Control from Beginning to End 7-5

Quality Control for Single Family Production

Advertising 7-8(I)

Automated Underwriting 7-9(A)

Basic Requirements 7-6

Condition Clearance and Closing 7-6(G)

Documentation Review and Verification 7-6(E)

Early Payment Defaults 7-6(D)

Escrow Funds 7-8(E)

Fair Lending 7-8(A)

Frequency 7-6(B)

HECM Loans 7-9(C)(2)

HMDA 7-8(B)

Ineligible Participants 7-8(C)

Mortgage Insurance Premiums 7-8(F)

RESPA 7-8(D)

Sample Size and Loan Selection 7-6(C)

Section 203(k) Loans 7-9(C)(1)

Specific Elements 7-7

Streamline Refinances 7-9(B)

Timeliness 7-6(A)

Timely and Accurate Insurance 7-8(G)

Underwriting Decisions 7-6(F)

Underwriting 7-8(H)

Quality Control for Single Family Servicing

Areas to be reviewed 7-10(A)

Basic Requirements 7-10

Fair Lending 7-11(C)

Ineligible Participants 7-11(B)

Required Elements 7-12

RESPA 7-11(A)

Sample Size 7-10(C)

Timeliness and Frequency 7-10(B)

Transfer of Servicing 7-11(D)

References, List of See page ii of Forward

References, Online locations See page ii of Forward

Registration, Branches

Direct Lending Branch Offices 5-8

Loan Correspondent Branches 5-7(C)

Mortgagee Branches 5-7(B)

New Branch 5-7

Registration Fee 5-7(A)

Regulations See page i of Forward

Renewal of Approval, Summary 1-3, 4-1

Reporting Fraud, Illegal Acts, and Unethical Practices to HUD 1-14

Reports, Submitted by Lenders 1-11

Requirement to Notify HUD of Changes Subsequent to Approval 2-24

Resumes 3-2(A)(5)

Sale or Acquisition of Mortgagee 6-18

Sanctions Letter 3-2(A)(14)

Senior Officer, Change of 6-11

Servicing, Permission for Supervised Loan Correspondent to Service

6-6

Shareholders Change in 6-13

Signatory Authority 2-9(E)

Single Family Homeownership Centers 7-13

Sponsor

Cover Letter 3-2(A)(1)

Registration 5-17

Termination of Sponsorship 6-5

Staff

Control and Supervision 2-9(D)

Staffing Requirements 2-12

Starter Kit 3-12(G)

State Approval of ôdbaö 3-2(A)(8)

State Licensing Requirements 2-3

Streamline Refinance, Lending Area 2-19(D)

Supervised Entity, Conversion to Nonsupervised Entity 6-16(C)

Supervised Loan Correspondent

Additional Approval Requirements 2-28

Conversion to Nonsupervised Entity 6-16(C)

Conversion to Supervised Mortgagee 6-16(B)

Supervised Mortgagee

Additional Approval Requirements 2-26

Conversion to Nonsupervised Entity 6-16(C)

Conversion to Supervised Loan Correspondent 6-16(A)

Termination of Supervision 6-19

Termination

Errors and Omissions Coverage 6-20

FHA Approval 4-9

FHA Mortgagee Approval 4-9

Fidelity Bond 6-20

Loan Correspondent-Sponsor Agreement 6-5

Principal-Authorized Agent Relationship 6-4

Supervision of a Supervised Mortgagee 6-19

Voluntary Termination 6-25

Voluntary Withdrawal of FHA Approval 6-25

W-2 Compensation, Employees 2-9(A)

4060.1 REV-2

4060.1 REV-2

Index-8 08/06

08/06 Index-9

08/06