A high percentage of FHA-insured mortgage loans were deemed unacceptable after a post-endorsement review performed by the FHA revealed material defects that apparently went undetected at the time the loans were approved, according to the Department of Housing and Urban Development. In a recent report by HUD’s Office of Lender Activities and Program Compliance, 44 percent of 6,251 single-family mortgage loans that underwent post-endorsement loan reviews in the first quarter of 2013 were found initially unacceptable. Under the FHA’s three-tier rating system, loans are rated as “conforming,” “deficient” or “unacceptable.” The review found...