AWACSMortgage compliance intelligence from Flightline

FHA · Mortgagee Letter ML 2025-16 · Published

Rescission of Full-Time Direct Endorsement Underwriter Requirements

FHA has eliminated the full-time employment and full-time experience requirements for Direct Endorsement (DE) underwriter eligibility, permitting mortgagees to employ DE underwriters on a part-time basis. Mortgagees must continue to ensure their DE underwriters are permanent employees of a single mortgagee and that underwriting functions are not contracted out.

Review recommendedIn effect nowChecks passed· adjusted automaticallyRead the letter ↗ (opens in a new tab)

Loan impact

From the letter text · needs review

Applies to: All FHA Title II forward mortgage and Home Equity Conversion Mortgage (HECM) programs.

Addressed to
All FHA-Approved Mortgagees
Investor
FHAFrom the publisher, not quoted from the text
Programs
FHAFrom the publisher, not quoted from the text
Applicability confidence
Needs review: some rows could not be matched to a quote from the source

What changed

From the letter text · Sections I.B.3.b.i, I.B.3.b
RequirementPreviouslyNow
Direct Endorsement underwriter full-time employment and experienceRelaxedSection I.B.3.b.iNot statedMortgagees are permitted to employ Direct Endorsement underwriters on a part-time basis, and experience requirements are revised to accommodate part-time employment.
Direct Endorsement underwriter single mortgagee employment and non-contracting requirementClarifiedSection I.B.3.bNot statedMortgagees must continue to ensure their DE underwriters are permanent employees of a single Mortgagee and underwriting functions are not contracted out.

What to do

AWACS interpretation · not source language

What to review: Review the flexibility permitting part-time employment and experience for Direct Endorsement underwriters, ensuring staffing policies still enforce permanent employment with a single mortgagee and prohibit contracting out underwriting duties.

QC implications

  • Quality control should verify that any part-time Direct Endorsement underwriters remain permanent employees of a single mortgagee.
  • Quality control should confirm that underwriting functions are not contracted out.

Source and record

Version 1 · archived

Checks

  • Source verified: Passed

    The document ID, link and publication date match the official source.

  • Quotes match the source: Passed, adjusted automatically

    Every quoted passage appears word for word in the official document.

    • A detail the source does not support was removed or adjusted

  • Requirements backed by the source: Passed, adjusted automatically

    Anything marked required is backed by the requirement language and dates in the source.

    • A detail the source does not support was removed or adjusted

  • In scope: Passed

    The document is about residential mortgage lending.

  • Format and labels: Passed

    The record follows the AWACS format and uses its standard labels.