202.6—Supervised lenders and mortgagees.
(a) Definition.
A supervised lender or mortgagee is a financial institution that is a member of the Federal Reserve System or an institution whose accounts are insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration. A supervised mortgagee may submit applications for mortgage insurance. A supervised lender or mortgagee may originate, purchase, hold, service or sell loans or insured mortgages, respectively.
(b) Additional requirements.
In addition to the general approval requirements in § 202.5, a supervised lender or mortgagee shall meet the following requirements:
(2) Notification.
A lender or mortgagee shall promptly notify the Secretary in the event of termination of its supervision by its supervising agency.
(3) Fidelity bond.
A Title II mortgagee shall have fidelity bond coverage and errors and omissions insurance acceptable to the Secretary and in an amount required by the Secretary, or have alternative insurance coverage, approved by the Secretary, that assures the faithful performance of the responsibilities of the mortgagee.