Only FHA’s Mortgagee Review Board (MRB) may withdraw a mortgagee’s FHA approval. Withdrawal of FHA approval applies to all offices of the mortgagee.
The mortgagee has the right to appeal a withdrawal of its FHA approval by the MRB in accordance with the provisions of 24 CFR Parts 25 and 26.
If the MRB determines there is adequate evidence that immediate action is required to protect the financial interests of HUD or the public, the MRB is authorized to withdraw a mortgagee’s FHA approval immediately; in this case, the withdrawal is effective upon the mortgagee’s receipt of the notice of withdrawal.
Any other withdrawal is effective upon either:
the expiration of the 30-day appeal period, if the mortgagee does not request a hearing; or
the receipt of the Administrative Law Judge’s final decision, if the mortgagee does request a hearing within the 30-day appeal period.
HUD will not endorse any mortgage originated by the withdrawn mortgagee unless it was an approved mortgage prior to the date of withdrawal.
The withdrawn mortgagee must transfer its servicing portfolio to another FHA-approved mortgagee.
Withdrawn FHA approval means that the mortgagee may not originate, underwrite, service, or purchase any FHA-insured mortgages.
The MRB’s withdrawal of a mortgagee’s FHA approval will be for a reasonable, specified period of time, but not less than one year. The MRB may permanently withdraw a mortgagee’s FHA approval if it finds the mortgagee’s violations to be egregious or willful. A withdrawn mortgagee’s approval is not reinstated at the end of the period of withdrawal. The mortgagee may reapply for FHA approval after the period of withdrawal has expired.
For additional information see Handbook 4000.1 V.E.4.b.vii.at http://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/handbooks/hsgh