FHA: HUD Uses FAQs to Communicate Policy Changes
By: Holly Spencer Bunting
Mortgagee Letters released by the Federal Housing Administration (“FHA”) appear to no longer be the final word on policy changes made by FHA and HUD related to FHA lending. Although FHA has maintained “FHA Frequently Asked Questions” on its website for some time, it only recently began to publish targeted Frequently Asked Questions in response to specific Mortgagee Letters and questions submitted by industry participants. Generally these FAQs reiterate the guidelines stated in Mortgagee Letters and define practical implications of implementation. However, with FHA’s most recent release of FAQs related to Mortgagee Letter 2011-34 and HUD’s October 25, 2011 Industry Call (“FAQs”), HUD has reversed its position on at least one issue (in lenders’ favor) and offered other guidance that is not clear from the plain language of Mortgagee Letter 2011-34.