source:
  type: regulation
  id: hud-ml-2024-14
  authority: HUD Mortgagee Letter 2024-14
  description: 'HUD Mortgagee Letter 2024-14. See obligation entries for operative

    requirements and verbatim primary-source citations.

    '
obligations:
- id: hud-ml-2024-14-tpo-involvement-tier-1
  canonical_id: hud-ml-2024-14-tpo-involvement-tier-1
  section: "HUD ML 2024-14 — FHA Defect Taxonomy IV.B (Fraud or Misrepresentation): TPO-employee involvement triggers \"knew or should have known\""
  description: "For loan-level FHA quality-assurance reviews, [LENDER] is treated by FHA\nas having \"knew or should have known\" of fraud or material\nmisrepresentation in the loan file — and is therefore exposed to Tier 1\nseverity classification and life-of-loan indemnification — whenever (i)\nan employee of [LENDER] or its sponsored Third-Party Originator was\ninvolved in the fraud or material misrepresentation, and/or (ii) red\nflags in the loan file should have been questioned by the underwriting\nMortgagee.\n"
  type: monitor
  audit_question: Can [LENDER] evidence a TPO-oversight program that identifies sponsored-TPO-employee involvement in any fraud or material misrepresentation in the FHA loan file, knowing that such involvement is now a Tier 1 'knew or should have known' condition exposing [LENDER] to life-of-loan indemnification?
  workflow_phase: post_closing
  owner_role: compliance_officer
  secondary_owner_role: default_servicing_analyst
  cadence: continuous
  consequence: ''
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - defect-taxonomy
  - tpo-oversight
  - fraud
  - indemnification
  - promoted
  primary_source:
    tier: 1
    authority: "HUD ML 2024-14 — Handbook 4000.1 Appendix 8.0 IV.B"
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2024-14hsgml.pdf
    snapshot_id: c6f55a5b11cb15de
    fetched_at: '2026-05-22T19:54:46Z'
    content_hash: sha256:b7169c9e186e36279802532f2f9927388b223d788aa4cb2417060540fbfd7b80
    paragraph_quote: "B) FHA determines if the Mortgagee knew or should have known based on \nwhether: \n− an employee of the Mortgagee or sponsored Third-Party Originator \nwas involved and/or"
    drafter_attestation: 'Copied verbatim from snapshot c6f55a5b11cb15de (content.txt) at

      2026-05-22T20:10Z. Substring is the updated Defect Taxonomy IV.B

      determinative-conditions list as inserted by ML 2024-14, including the

      TPO-employee-involvement bullet that now triggers Tier 1 severity.

      '
  promoted_at: '2026-05-22T20:17:33+00:00'
  promoted_from: hud-ml-2024-14-roundb-v1.yaml
  program_review: Do the P&Ps facilitate a TPO-oversight program that detects sponsored-TPO-employee involvement in fraud/material misrepresentation and unquestioned loan-file red flags — given these now trigger Tier 1 'knew or should have known' classification and life-of-loan indemnification?
  file_review: Review TPO-oversight records and a loan-file sample; the compliance person judges whether sponsored-TPO-employee involvement or unquestioned red flags exist that would meet the Tier 1 condition.
  judgment: true
_promotion_history:
- promoted_at: '2026-05-22T20:17:33+00:00'
  candidate_path: obligations\_remediation\_round_b_drafts\hud-ml-2024-14-roundb-v1.yaml
  candidates_promoted: 1
  candidates_skipped_existing: 0
