The Department of Housing and Urban Development (HUD) gave more details Thursday on its plan to weed out underperforming Federal Housing Administration (FHA) lenders.

Every three months, the agency will review all FHA loans originated over the preceding two years, FHA Commissioner David Stevens wrote in a memo to lenders. For the first review, covering loans made through Dec. 31 of last year, HUD will terminate any lender whose default and claim rate was more than triple that of its region and higher than the national rate.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.