Smaller federally regulated financial institutions that make loans insured by the Federal Housing Administration are being exempted from some annual reporting requirements.
The Department of Housing and Urban Development previously issued Mortgagee Letter 2009-31 (ML 09-31) requiring supervised lenders to submit audited financial statements each year.
The statements are required in accordance with HUD Office of Inspector General Handbook 2000.04.
The handbook “requires the submission of a report on internal control as it relates to administering HUD-assisted programs and a report on compliance with specific requirements applicable to major and non-major HUD programs (internal control and compliance reports),” HUD said in Mortgagee Letter 2012-29.
But a waiver permits small supervised lenders to submit unaudited regulatory reports to FHA instead of audited financial statements.
This means that qualifying lenders can submit the report of condition and income, also known as the “call report” that is submitted on the Federal Financial Institutions Examination Council forms 031 and 041, instead of audited financials.
Another acceptable replacement is the consolidated fourth-quarter NCUA call report submitted on NCUA Form 5300 or 5310.
However, small supervised lenders were still required to submit internal control and compliance reports.
So HUD issued interim guidance addressing the requirement.
“This mortgagee letter eliminates the requirement for small supervised lenders to submit internal control and compliance reports,” HUD said.
But non-supervised lenders, as well as supervised lenders with consolidated assets that meet or exceed audited financial reporting thresholds set by their federal regulator, aren’t impacted by the interim requirements and will need to continue submitting audited financial statements.
The latest mortgagee letter became effective on Dec. 21.
