FHA will provide the Mortgagee with written notice of the proposed withdrawal that identifies the grounds for the action and advises the Mortgagee of its right to an informal conference.
FHA may withdraw the Direct Endorsement (DE) authority of any Mortgagee that demonstrates a pattern or practice of failing to comply with FHA underwriting guidelines or program requirements. This action is separate and apart from a Credit Watch Termination action. FHA may terminate a Mortgagee’s approval to participate in the DE Program in a particular jurisdiction or on a nationwide basis.
For additional information see Handbook 4000.1 V.E.3.a.ii(B) at: