No way that that rule is even enforcable. Everyone has the right to pick their financers, and it seems pretty certain that no one can force a buyer to use one particular company. Now, the lenders can probably be held to higher standards, and possibly the same requirements that FHA is held to. That might be the case.
how it works if your are behind on your payments or are ready to go into forclosure! You contact your lender they will see if FHA loans are available to you so you can stay in your home. The new way to get bad credit home mortgage loans. backed buy us the tax payers.