Does FHA require Mortgagees to perform on-site reviews for its sponsored Third-Party Originators (TPO)?

No. Mortgagees are not required to perform on-site reviews of sponsored Third-Party Originators (TPO). 
The Mortgagee must perform Quality Control reviews of its Affiliates in the same manner and under the same conditions as required for the Mortgagee’s own operations. Affiliates are contractors, agents, vendors, subservicers, and sponsored TPOs who participate in FHA programs on behalf of an FHA-approved Mortgagee.
At a minimum, Affiliate monitoring must include a periodic (semiannual at a minimum) re-verification of the Affiliate’s compliance with all applicable laws related to licensing, qualification, eligibility, or approval to originate or subservice Mortgages.
The procedures used to review and monitor a Mortgagee’s Affiliates must be included in the Mortgagee’s QC Plan.
For additional information, see Handbook 4000.1 V.A.2.b.ii at:

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-03232