The Department of Housing and Urban Development (HUD) is moving to raise the bar for lenders that do business with the Federal Housing Administration (FHA) at a time when that agency's market share, and credit risk, are soaring.

HUD said Friday that it will propose a rule hiking the minimum net worth requirement for FHA lenders to $1 million. This would ensure lenders have the financial wherewithal to indemnify the FHA, which insures mortgages with low down payments, against losses on loans they made that were not properly vetted.

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