Quotes below. Read the full article here: Draft defect taxonomy could have “chilling effect” on FHA market
Meg Burns, executive vice president of the Housing Policy Council, who was previously director of the Department of Housing and Urban Development’s office of single family program development, said the document did not rise above a “list of sections of the single-family handbook without any specific requirements."
“I think [HUD] would like for this to be the kind of document that would serve as a compliance roadmap that would indicate what is important,” said Burns. “Unfortunately, it lacks the detail necessary to serve that purpose.”
Mortgage and servicing trade associations, in theory, support the idea of a defect taxonomy. Matt Douglas, vice president of mortgage policy at the Housing Policy Council, explained that such a document is necessary to explain what happens when a servicer or originator makes a mistake.
“If you make millions of loans and someone audits them and finds you did something wrong,” Douglas asked, “How big of a deal is it? Is it a slap on the wrist or death penalty?”