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Open Mortgage has FHA direct endorsement authority terminated in Iowa | Black Kite Express

He US Department of Housing and Urban Development (HUD) has ended the Federal Housing Administration (FHA) approval of direct support for Open mortgage in Iowa.

“HUD placed Open Mortgage on credit watch for the Des Moines HOC (home ownership center), which only impacts our loans in Iowa,” said Christopher D’Auria, president and CEO of Open Mortgage. HousingWire.

“Our direct support authority remains unchanged outside of that HOC. “We have worked with HUD to address the issues associated with this situation and are working to resolve them so we can reapply for authority in Iowa later this year.”

Texas-based multi-channel lender Open Mortgage has originated about $400 million in mortgages in the past 12 months, per mortgage technology platform. Modex.

Most of its loans over the past year were in Kansas (12.5%), Mississippi (11.4%) and Florida (9.7%). Iowa was responsible for 3.4% of the total, Modex data shows.

In practice, direct underwriting authority allows lenders to underwrite single-family mortgages and submit them to the FHA for insurance underwriting. Open Mortgage’s termination is based on the “poor performance” of these loans, HUD stated.

HUD’s decision on Open Mortgage will be published in the Federal register On Wednesday. The effective termination date is May 20. Internal mortgage financing reported for the first time on the subject.

Under its current rule, HUD can rescind direct support approval from any lender whose default and claim rate in the past 24 months exceeds 200% of the geographic area served by a local HUD office, or the national default and claim rate. for insured mortgages. .

Following the decision, FHA loans already underwritten and approved by a Direct Endorsement insurer, as well as cases with a firm commitment issued by HUD, may be submitted for insurance endorsement. Cases in the early stages can be transferred to other lenders with FHA approval.

Open Mortgage had 67 sponsored loan officers and 23 active branches as of Tuesday, according to the Nationwide Multistate Licensing System (NMLS).

In November 2023, the company closed its reverse mortgage origination division after lower origination volumes combined with lower recovery rates made the cost of closing reverse mortgages too high. Open Mortgage has continued to operate in the term loan space.

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