What is a Sponsor-Sponsored Third Party Originator relationship and how is it set up?

A Sponsor/Sponsored Third-Party Originator (TPO) Relationship is one in which a Mortgagee with Direct Endorsement (DE) Authority (acting as the “sponsor”) permits another entity to act as an originator and originate mortgages on their behalf.

Only a Mortgagee with Direct Endorsement Authority may use sponsored TPOs.

A sponsored TPO is authorized to originate Mortgages for sale or transfer to a Mortgagee with DE authority.  A Mortgagee must ensure its sponsored TPO does not close Mortgages in the TPO's own name.

However, a Mortgagee may permit its sponsored TPO to close Mortgages in their own name if the TPO is also a Mortgagee.

A Mortgagee with Unconditional DE authority must confirm registration of its sponsored TPO on the Sponsored Originator Maintenance screen in FHA Connection (FHAC).  A Mortgagee must register its sponsored TPO on the Sponsored Originator Maintenance screen in FHAC if the sponsored TPO is not on the registry. The sponsored TPO’s legal name and Employer Identification Number (EIN) must be included.

The FHA Connection Guide is available at https://entp.hud.gov/idapp/html/mrtg-pkg.cfm

For additional information see Handbook 4000.1 I.A.5.a.v. available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-02252