A final rule goes into effect August, 1 that makes two changes to the Rural Housing Service (RHS) Section 502 Single Family Housing Guaranteed Loan Program (SFHGLP). The first is an elimination of, “the lender’s published Department of Veterans Affairs (VA) rate for first mortgage loans with no discount points as an option for a maximum interest rate on loans.” The second change will allow, “the Secretary to seek indemnification from the originating lender if a loss is paid under certain circumstances.” You might be wondering what those circumstances are…
(i) The originating Lender utilized unsupported data or omitted material information when submitting the request for a conditional commitment to RHS;Show citation box
(ii) The originating Lender failed to properly verify and analyze the applicant’s income and employment history in accordance with Agency guidelines;Show citation box
(iii) The originating Lender failed to address property deficiencies identified in the appraisal or inspection report that affect the health and safety of the occupants or the structural integrity of the property;Show citation box
(iv) The originating Lender used an appraiser that was not properly licensed or certified, as appropriate, to make residential real estate appraisals in accordance with § 1980.334(a) of this subpart; or,
2) To indemnify RHS for the loss, regardless of how long ago the loan closed, if RHS determines that there was fraud or misrepresentation in connection with the origination of the loan of which the originating Lender had actual knowledge at the time it became such Lender or which the originating Lender participated in or condoned. Misrepresentation includes negligent misrepresentation.
For further information contact:
Joaquin Tremols, Acting Director, Single Family Housing Guaranteed Loan Division, USDA Rural Development, Room 2241, STOP 0784, 1400 Independence Ave., SW., Washington, DC 20250, Telephone: (202) 720-1465, E-mail: joaquin.tremols@wdc.usda.gov.
{ 0 comments }