A) Federal, state and municipal government agencies and Federal Reserve banks. A federal, state or municipal government agency or a Federal Reserve bank can be an approved lender or mortgage lender. A mortgagee approved under this paragraph may submit applications for Title II mortgage insurance. A lender or mortgagee approved under this paragraph can originate, buy, manage or sell Title I loans and secured mortgages (page 4586), respectively.
A mortgagee or lender approved under this paragraph is not required to meet a net worth requirement. The lender or mortgagee will maintain fidelity bond coverage and insurance against errors and omissions that the Secretary deems acceptable and for the amount required by the Secretary, or alternative insurance coverage approved by the Secretary, that guarantees faithful compliance with the mortgagee's responsibilities. There are no additional requirements beyond the general approval requirements set out in § 202.5 or as provided in paragraph (c) of this section. For several years, certain GSEs have maintained that they do not have the infrastructure that other lenders and mortgagees listed in § 202.10 have to ensure compliance with FHA requirements related to the origination of loans and mortgages, since they cannot originate loans or mortgages.
By defining GSEs separately, it would be clear that GSEs do not carry out loan or mortgage origination activities and are therefore not subject to specific FHA requirements for loan or mortgage origination. The FHA has reviewed the mission and structure of GSEs and has determined that they should not be subject to specific FHA requirements for loan and mortgage origination because GSEs do not create loans or mortgages. GSEs would be identified as the federal mortgage lending banks, the Federal Mortgage Mortgage Loan Corporation (commonly known as Freddie Mac) and the Federal National Mortgage Association (commonly known as Fannie Mae). In other provisions, the final rule eliminates the current FHA approval of loan correspondents or mortgage brokers, effective December 31.