Does a mortgage broker or lender need to be a FHA approved lender to originate a single family loan that is subsequently insured by FHA?

Mortgage Lenders must hold an FHA Lender Approval in order to underwrite, close, or fund a mortgage loan. The FHA loan origination process has 5 components: (1) taking a FHA loan application, (2) processing it, (3) underwriting it, (4) closing it and (5) funding the mortgage.

Mortgage Brokers do not need an FHA Lender Approval. A mortgage broker can take an application and process it, but an FHA Approved Lender must underwrite, close, and fund the mortgage.

There are two recently issued mortgagee letters concerning non-FHA approved mortgage brokers. They are ML 08-14 and 08-17.