In October of 2007, HUD issued a policy alert regarding compensation to non-HUD approved mortgage brokers in connection with FHA loans.  While this is true, it should be noted that FHA requirements specifically permit a non-approved broker to assist a prospective FHA borrower in obtaining an FHA loan. In such instances, the payment to the Broker must be paid from the borrower’s own assets, must be disclosed on the HUD-1 (with a copy of the contract in the FHA loan file), and must be reasonably related to the services performed by the Broker. 

Compliance policies and procedures for non-HUD approved brokers.  

• Artisan Mortgage cannot pay a non-HUD approved entity in any form.
• Broker cannot charge an origination fee.
• Broker cannot receive yield-spread premium.
• Borrowers can pay a State licensed entity a reasonable mortgage brokerage fee for providing services for the client. The fee will be disclosed in the APR, on the good faith estimate of closing costs, loan commitment and HUD-1.
• Brokers must supply Artisan Mortgage with a copy of their state license and a state compliant fee agreement executed by the client when transferring the client to Optimal FHA.
• Once a file has been turned over to be re-processed for FHA by Optimal FHA, the broker cannot handle or transmit any of the needed documents to process or underwrite the file.

Additional HUD and RESPA documentation, along with detailed submission instructions, are available in our broker package.

9051 W. Kelton, Suite 8 - Peoria, AZ 85382
Licensed in AZ (B-0907489), CA, NM