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f. Ineligible Participants (05/09/2022)
i. Origination and Underwriting Reviews
(A) Standard
The Mortgagee must verify that none of the participants in the mortgage transactions reviewed were debarred, suspended, under an LDP for the FHA program and jurisdiction, or otherwise ineligible to participate in an FHA transaction. This includes participants in an assumption transaction.
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V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE A. Quality Control of Lenders and Mortgagees
3. Loan Level Quality Control Program Requirements
Participants in a mortgage transaction may include, but are not limited to, the:
• seller (excluding the seller of a Principal Residence)
• listing and selling real estate agent
• loan originator
• Dealer
• retailer involved in a Manufactured Home Loan
• loan processor
• underwriter
• Appraiser
• 203(k) Consultant
• Closing Agent
• title company
The Mortgagee must verify participant eligibility using the SAM Excluded Parties List, the LDP List, and NMLS, as applicable.
(B) Required Documentation
The Mortgagee must maintain documentation that supports each participant’s eligibility.
ii. Servicing Reviews
(A) Standard
The Mortgagee must verify that none of the participants in the servicing transactions reviewed were debarred, suspended, under an LDP for the FHA program and jurisdiction, or otherwise ineligible to participate in an FHA transaction. This includes participants in a loss mitigation transaction.
Participants in a servicing transaction may include, but are not limited to:
• Borrowers applying for a Loss Mitigation Option
• underwriters
• real estate brokers
• Closing Agent
• title company
• employees of the Mortgagee, or Affiliates participating in HUD programs for or on behalf of the Mortgagee, who have influence or control over the evaluation, approval, or outcome of the servicing loss mitigation, or claims transaction.
The Mortgagee must verify participant eligibility using the SAM Excluded Parties List and the LDP List, as applicable.
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V. QUALITY CONTROL, OVERSIGHT, AND COMPLIANCE A. Quality Control of Lenders and Mortgagees
4. Data Integrity
(B) Required Documentation
The Mortgagee must maintain copies of each participant’s eligibility verification printouts.