A.15.1 Background and Purpose

A. HUD must manage a variety of risks in the MAP Program and must maintain an appropriate balance between managing these risks and achieving its mission under the National Housing Act. The MAP Guide, and the regulations and statutes on which it is based, sets forth standards and requirements for all active MAP lenders under the program, as well as the loans they underwrite and applications they submit. By referencing examples of noncompliance and deficiencies from the MAP Guide and identifying their relative severity, this taxonomy gives lenders greater clarity on HUD’s risk management process and better advises them of what compliance risks and what loan underwriting or application processing deficiencies may result in sanctions and an enforcement action under Chapter 15.

B. The bases for issuing a Letter of Caution, a Warning Letter or other sanction are set forth in this Appendix and in Chapter 15, Section 15.6 and Section 15.7. Note that any specific sanctions or enforcement actions will be based on the facts and circumstances of the individual lender’s actions or inactions and of the specific MAP transaction.

C. The taxonomy does not limit HUD’s remedies for fraud or misrepresentation in the MAP program or preclude HUD from referring lenders to the MAP Lender Review Board, the Mortgagee Review Board or the Departmental Enforcement Center for noncompliance or deficiencies which, in HUD’s judgment, warrant such a referral. Nor does it establish any new standards for administrative or civil enforcement actions, which are currently set forth in law.