Does a mortgage broker or lender need to be a FHA approved lender to originate a single family loan that is subsequently insured by FHA?
Yes. Only FHA approved lenders can originate a loan that is subsequently insured by FHA. The FHA loan origination process has 5 components: (1) taking a FHA loan application, (2) processing it, (3) underwriting it, (4) closing it and (5) funding the mortgage. There are two recently issued mortgagee letters concerning non-FHA approved mortgage brokers. They are ML 08-14 and 08-17 available at: http://www.hud.