The Federal Housing Administration (FHA) is introducing a variety of measures to ensure that only credible players operate as mortgage brokers. In the recent past, the market has seen a number of unscrupulous brokers trying to mislead and make money from unsuspecting borrowers. William Apgar, the senior adviser to the secretary for mortgage finance at the Department of Housing and Urban Development says, "These folks know how to scam people and they're now trying to scam people in a new way.
But these guys haven't just invaded FHA. They're in every corner of the world." In the past, brokers could refer applicants to approved lenders and charge the borrower a fee without prior approval. Now brokers who originate FHA mortgages will have to obtain approval in advance from the federal Department of Housing and Urban Development, of which FHA is a division. In addition, individuals convicted of making fraudulent loans cannot take part in the FHA program. Richard L. Tracy Jr., a board member of the Connecticut Society of Mortgage Brokers and an FHA-approved lender, welcomed FHA's measures and advised borrowers to "go to the Web site of their state banking departments to verify the lenders' licenses" before using their services.
Monday, June 8, 2009
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