The Mortgagee Review Board (MRB) is empowered to take administrative action against FHA approved lenders that are not in compliance with FHA lending requirements. The Board reviews cases that are referred. The cases before the Board typically include cases involving lenders who knowingly and materially violate HUD/FHA program statutes, regulations and handbook requirements. These lenders are subject to administrative sanctions by the MRB. For serious violations, the Board can withdraw a lender's FHA approval so the lender cannot participate in FHA programs. In less serious cases, the Board enters into settlement agreements with lenders to bring them into compliance. The Board can also impose civil money penalties, probation, and suspension and issue letters of reprimand.
Some of the cases that are heard before the board include, but are not limited to:
- Failure to implement and maintain a Quality Control Plan;
- Failure to perform loss mitigation and service loans in accordance with requirements;
- Source of funds issues regarding the borrower's down payment (e.g., improperly documented gift letters, insufficient funds to close, use of unacceptable source of funds, and improperly documented source of funds);
- Questionable income, assets and liabilities of the borrower (e.g., failure to document discrepancies between the credit report and credit application);
- Problems with appraisals (e.g., poor comparables, unsubstantiated value adjustments, unsupported values based on the information available, unreported physical deficiencies, "flip transactions" involving a recent change in ownership or a different owner than on the sales contract, and the same people involved in numerous transactions);
- False statements and certifications;
- Excessive mortgage payment to income ratios and debt to income ratios;
- Inaccurate Settlement Statements (e.g., charging unallowable fees);
- Failure to timely remit Upfront and Monthly Mortgage Insurance Premiums to HUD;
- Failure to comply with FHA's annual recertification requirements; and
- Improper branch operations (e.g., allowing Debarred or Limited Dential of Participation employees to work on HUD/FHA insured loans).
The following individuals are voting members of the MRB:
- Assistant Secretary for Housing-Federal Housing Commissioner (also serves as the Chairperson of the Board)
- President of Ginnie Mae;
- HUD's General Counsel;
- Chief Human Capital Officer;
- Chief Financial Officer; and
- Assistant Secretary for Fair Housing and Equal Opportunity.
The non-voting advisors to the Board are:
- HUD's Inspector General;
- Director of HUD's Office of Lender Activities and Program Compliance;
- HUD's Chief Risk Officer; and
- Office of General Counsel's Office of Program Enforcement.
The MRB receives support from the Mortgagee Review Board Division of the Office of Lender Activities and Program Compliance, as well as the Office of Program Enforcement Division of the Office of General Counsel. The MRB Division and the Office of Program Enforcement prepare and present cases to the MRB and implement the MRB's decisions. The Director of the MRB Division serves as the Secretary of the MRB.
If you have any questions about the Mortgagee Review Board, please contact the FHA Resource Center at firstname.lastname@example.org or (800) 225-5342.