V.A.3.f. Ineligible Participants (09/14/15)

© HUD Single Family Housing Policy Handbook 4000.1

Included in this section are:

Origination and Underwriting Reviews
Servicing Reviews

i. Origination and Underwriting Reviews

(A) StandardThe Mortgagee must verify that none of the participants in the mortgage transactions reviewed were debarred, suspended, under an LDP for the FHA program and jurisdiction, or otherwise ineligible to participate in an FHA transaction. This includes participants in an assumption transaction.Participants in a mortgage transaction may include, but are not limited to, the:

seller (excluding the seller of a Principal Residence)
listing and selling real estate agent
loan officer
loan processor
underwriter
Appraiser
203(k) Consultant
Closing Agent
title company

The Mortgagee must verify participant eligibility using the SAM Excluded Parties List, the LDP list, and NMLS, as applicable.

(B) Required DocumentationThe Mortgagee must maintain documentation that supports each participant’s eligibility.

ii. Servicing Reviews

(A) StandardThe Mortgagee must verify that none of the participants in the servicing transactions reviewed were debarred, suspended, under an LDP for the FHA program and jurisdiction, or otherwise ineligible to participate in an FHA transaction. This includes participants in a loss mitigation transaction.Participants in a servicing transaction may include, but are not limited to:

Borrowers applying for an FHA-HAMP Loss Mitigation Option
underwriters
real estate brokers
Closing Agent
title company
employees of the Mortgagee, or Affiliates participating in HUD programs for or on behalf of the Mortgagee, who have influence or control over the evaluation, approval, or outcome of the servicing loss mitigation, or claims transaction.

The Mortgagee must verify participant eligibility using the SAM Excluded Parties List and the LDP list, as applicable.

(B) Required DocumentationThe Mortgagee must maintain copies of each participant’s eligibility verification print-outs.