C.F.R. » Title 24 » CHAPTER II—OFFICE OF ASSISTANT SECRETARY FOR HOUSING—FEDERAL HOUSING COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT › SUBCHAPTER B—MORTGAGE AND LOAN INSURANCE PROGRAMS UNDER NATIONAL HOUSING ACT AND OTHER AUTHORITIES › PART 202—APPROVAL OF LENDING INSTITUTIONS AND MORTGAGEES › Subpart B—Classes of Lenders and Mortgagees

24 C.F.R. § 202.8

Sponsored third-party originators

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(a) Definitions—Sponsor. (1) With respect to Title I programs, a sponsor is a lender that holds a valid Title I Contract of Insurance and meets the net worth requirement for the class of lender to which it belongs.

(2) With respect to Title II programs, a sponsor is a mortgagee that holds a valid origination approval agreement, is approved to participate in the Direct Endorsement program, and meets the net worth requirement for the class of mortgagee to which it belongs.

(3) Each sponsor shall be responsible to the Secretary for the actions of its sponsored third-party originators or mortgagees in originating loans or mortgages, unless applicable law or regulation requires specific knowledge on the part of the party to be held responsible. If specific knowledge is required, the Secretary will presume that a sponsor has knowledge of the actions of its sponsored third-party originators or mortgagees in originating loans or mortgages and the sponsor is responsible for those actions unless it can rebut the presumption with affirmative evidence.

Sponsored third-party originator. A sponsored third-party originator may hold a Title I Contract of Insurance or Title II Origination Approval Agreement if it is an FHA-approved lender or mortgagee. If the sponsored third-party originator is not an FHA-approved lender or mortgagee, then the sponsored third-party originator may not hold a Title I Contract of Insurance or Title II Origination Approval Agreement. A sponsored third-party originator is authorized to originate Title I direct loans or Title II mortgage loans for sale or transfer to a sponsor or sponsors, as defined in this section, that holds a valid Title I Contract of Insurance or Title II Origination Approval Agreement and is not under suspension, subject to the sponsor determining that the third-party originator has met the eligibility criteria of paragraph (b) of this section.

(b) Eligibility to originate loans to be insured by FHA. A sponsored third-party originator may originate loans to be insured by FHA, provided that:

(1) The sponsored third-party originator is working with and through an FHA-approved lender or mortgagee; and

(2) The sponsored third-party originator or an officer, partner, director, principal, manager, supervisor, loan processor, or loan originator of the sponsored third-party originator has not been subject to the sanctions or administrative actions listed in § 202.5(j), as determined and verified by the FHA-approved lender or mortgagee.

[75 FR 20734, Apr. 20, 2010, as amended at 77 FR 51468, Aug. 24, 2012]
Notes of Decisions
Cited in 5 cases, 2001–2019 · leading case: United States v. Robert S. Luce, 873 F.3d 999 (7th Cir. 2017).
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United States v. Robert S. Luce, 873 F.3d 999 (7th Cir. 2017). · cites it 2× “5 (emphasis added) (citing 24 C.F.R. § 202.8 (a)(2)(2009)). We recognize that some loan correspondents have more expansive roles (e.”
United States v. Allied Home Mortg. Corp., 933 F.3d 468 (5th Cir. 2019). “24 C.F.R. § 202.8 (a). Instead, information it collected was forwarded to Allied Corporation, the lender or mortgagee responsible for underwriting and funding the loan.”
Bjustrom v. Trust One Mortg., 178 F. Supp. 2d 1183 (W.D. Wash. 2001). “24 C.F.R. § 202.8 (7) (2001). Mortgage brokers receive compensation for their work through numerous fees and charges, which are regulated by the Department of Housing and Urban Development (“HUD”), the agency that oversees the FHA.”
Labrador v. Seattle Mortg. Co., 681 F. Supp. 2d 1106 (N.D. Cal. 2010). · cites it 2× “8 In other contexts, specifically in its RESPA regulations, HUD explicitly includes loan correspondents within its definition of “mortgage broker,” stating that “[a] loan correspondent approved under 24 CFR 202.8 for Federal Housing Administration programs is a mortgage broker…”
United States v. Allied Home Mortg. Corp. (5th Cir. 2019). “24 C.F.R. § 202.8 (a). Instead, information it collected was forwarded to Allied Corporation, the lender or mortgagee responsible for underwriting and funding the loan.”
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