As an approved HUD/FHA mortgagee (Lender or Loan Correspondent) and if you have one or more traditional and/or non-traditional branch office(s) engaged in the origination of FHA-insured loans, you MUST review each office annually to determine if the branch office(s) are in compliance with HUD/FHA requirements.

The following is a partial list of the items that must be included in the audit of the branch office:

• The office is properly registered with HUD and the address is current.
• Operations are conducted in a professional, business-like environment.
• If located in commercial space, the office is properly and clearly identified for any walk-in customers; must have adequate office space and equipment;
• Is in a location conducive to mortgage lending; and is separated from any other entity by walls or partitions (entrances and reception areas may be shared).
• If located in non-commercial space, the office has adequate office space and equipment;
• Displays a fair housing poster if the public is received;
• If it is open to receive the public, it must be accessible to persons with disabilities, including those with mobility impairments;
• If it is not open to the public, but used occasionally to meet with members of the public, alternate means of accommodation may be used to serve persons with disabilities.
• The office is sufficiently staffed with trained personnel.
• Office personnel have access to relevant statutes, regulations, HUD issuances and Handbooks, either in hard copy or electronically.
• Procedures are revised to reflect changes in HUD requirements and personnel are informed of the changes.
• Personnel at the office are all employees of the mortgagee or contract employees performing functions that HUD allows to be outsourced.
• The office does not employ or have a contract with anyone currently under debarment or suspension, or a Limited Denial of Participation.

Annual visits are mandatory for offices meeting certain higher risk criteria such as:

• High early default rates (200% and above default ratios).
• New branches or new key personnel.
• Sudden increases in volume, and past problems.  

Other sites must be reviewed to assure compliance with HUD's requirements at a frequency and in a manner determined appropriate by the mortgagee (Lender or Loan Correspondent).

• The criteria used by the mortgagee (Lender or Loan Correspondent) to determine the frequency of on-site reviews must be in writing and available for review by HUD at the corporate office for any branch office that is not being reviewed annually.

When it is not feasible for the mortgagee's Quality Control staff to visit each branch, qualified personnel from another office of the mortgagee, not involved in the day-to-day processes of loan origination , or an outside firm may perform the review.

Source: HUD Handbook 4060.1 REV-1 CHG-1

Let the QC-Xperts audit your branches and you will receive an unbiased third party arms length audit transaction that can be assured that meets all of HUD/FHA requirements.

For additional information or for a quote to audit your branch offices CLICK request a QUOTE and you will be on your way to being in compliance with HUD regulations.