The Department of Housing and Urban Development recently stripped three mortgage lenders of their FHA Direct Endorsement (DE) approval for having default and claim rates in excess of what the department normally allows on nationwide and local levels. Prior to the termination of their DE approval, the lenders were placed on FHA Credit Watch for evaluation following an audit that uncovered their unusually high default and claim rates within the areas they serve. HUD regulations call for the termination of an FHA lender’s DE approval and origination agreement if the default and claim rate for loans endorsed within the preceding 24 months exceeds...