Comment Submitted by Jeff Brader

The proposed ruling will allow FHA the authority to ask an approved mortgagee to indemnify on a loan up 5 years from endorsment for any violation whether or not it had any reason for why the loan defaulted. Everyone believes that fraud or blatant disregard for FHA guidelines are a basis for indemnification but to give FHA the authority to challenge any defaulted loan for paying a claim up to five years for any reason they feel did not meet all the guidelines is unwarranted and unjustly puts risk on the lender. If a loan performs for 2 years adequately demonstrates the quality of the loan. Default due to divorce, medical, job loss, etc within a 5 year period should not be allowed to be challenged for minor deficiencies. If passed this provision may deter lenders from participating in the FHA program and the result will increase costs and fees to the consumer due to asking the lender to absorb the potential for future increased liability.