From Send2Press® Newswire — Print Friendly Version
Banking and Finance News
P R E S S R E L E A S E :
Comergence Compliance Views HUD Memo on TPO
Management as Good Starting Point for Development of Due
Diligence Best Practices
Wed, 28 Apr 2010, 16:03:27 EDT
ORANGE, Calif. (SEND2PRESS NEWSWIRE) -- Greg Schroeder, president of
Comergence Compliance Monitoring, a leading provider of third-party originator (TPO)
monitoring and due diligence solutions, says he supports HUD's move to eliminate FHA
approvals for loan correspondents, thereby distancing itself from the risks inherent in the
current management of this origination channel.
On p. 20725 of the memo, "Federal Housing Administration: Continuation of FHA
Reform; Strengthening Risk Management Through Responsible FHA-Approved
Lenders" (http://edocket.access.gpo.gov/2010/pdf/2010-8837.pdf), HUD outlines 10
recommendations for verifying TPO compliance with FHA requirements. The
overarching theme within these recommendations is the need for lenders to establish
procedures for TPO interaction and activity surveillance. According to Schroeder, these
recommendations provide an excellent starting point for lenders to begin developing a sophisticated TPO due diligence
strategy, but what is absent from this list is guidance on how to execute these recommendations.
"For these recommendations to truly be effective, the underlying protocols and procedures must be developed with an eye
towards standardization across the industry," said Schroeder. "Comergence Compliance Monitoring has worked to establish
processes that would constitute best practices for TPO due diligence."
In its summary of the changes, HUD noted that some within the industry objected to the change on the grounds that
mortgagees would create an undue burden on mortgage bankers (mortgagees), as they would be forced to incur the cost of
hiring and training additional staff to process and close loans that would otherwise be managed by their correspondent
partners