As part of a concerted effort to make Federal Housing Administration's mortgage insurance program more relevant again, the Department of Housing and Urban Development is streamlining the approval process and updating its appraisal requirements.

But to paraphrase a familiar refrain, what the government giveth, the government taketh away. To wit, the agency is allowing lenders to charge borrowers a fee on loans that are registered with MERS, the Mortgage Electronic Registration System.

Margaret Burns, acting director of the FHA's Office of Single-Family Program Development, says the fee is permissible because MERS ultimately reduces costs for borrowers, mortgage lenders, the companies which service loans on a monthly basis, and investors who buy mortgage-backed securities. It does so by eliminating the need to prepare and record documents, which results in less paperwork.

The government did not say how much lenders can charge, and MERS has not yet to set down any guidelines. But if registration will reduce lenders' costs, then why should they charge borrowers for the privilege? Isn't that akin to collecting on both ends?

Be that as it may, the FHA also is instituting fast-track processing that will not only speed loan approvals but also save lenders money. Whether that savings finds its way into borrowers' pockets is another question entirely. But if the MERS fee is any indication, don't hold your breath.

Currently, when lenders apply for FHA insurance, they must transmit insuring data as well as mail paper case binders to one of HUD's Homeownership Centers before the loans are insured. But under the new expedited system, "high performance lenders" will handle the endorsement themselves and will be required to send electronic case binders to HUD only when asked to do so.

HUD says the new, re-designed process will reduce processing time by a third and lower direct insuring expense by as much as 25 percent.

The FHA also is eliminating two of its appraisal-related forms and updating its appraisal protocol. As part of the initiative, the agency will adopt four of Fannie Mae's recently revised appraisal reporting forms, which are now considered the industry standard.

The changes are part of HUD's overall effort to make the processing of FHA loans easier and more cost-efficient so that lenders will be better able to offer FHA-insured loans and expand the availability affordable financing.

"We're taking a giant leap forward in creating a more user-friendly loan origination process for our lending community," said Assistant Secretary for Housing-Federal Housing Commissioner, Brian Montgomery. "We can cut costs and processing time for lenders and give more home buyers the opportunity to choose FHA mortgages when, in many cases, they are a better fit for their circumstances."