A mortgagee can originate, underwrite, fund, service and/or own FHA insured loans. In addition, mortgagees can obtain supplemental approval as a Direct Endorsement (DE) mortgagee and Lender Insurance (LI) mortgagee for FHA single family loans and a Mutifamily Accelerated Processing (MAP) mortgagee for FHA multifamily loans. Mortgagees are also known as Full-Eagles because they can do any lender function on a FHA loans. States typically license non-supervised mortgagees as mortgage lenders. Some States have a correspondent lender’s license which allows a non-supervised mortgagee to originate, underwrite and fund mortgages but not service or own them. FHA mortgagees who are banks are considered supervised mortgagees.

HUD no longer approves loan correspondents (mini-eagles). Mortgage Brokers no longer need an approval from HUD. Mortgage Brokers can only originate loans that are underwritten by their sponsoring DE mortgagee. They can’t underwrite, own, close in their name, or service FHA insured loans.

Please see paragraph 1-2 in Chapter 1 of the FHA Title II Mortgagee Approval Handbook 4060.1, Rev-2