FHA to Lenders: ‘We Are Watching You Very Carefully’

The Federal Housing Administration initiated on Tuesday a probe of 15 mortgage companies that have disproportionately high default rates on loans insured by the government agency. Officials served subpoenas on the companies on Tuesday. The agency is looking at mortgage companies that have had above-average rates of loans that default shortly after origination, which is often a sign of fraud or sloppy underwriting.

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