pays an insurance claim with respect to the mortgage within a reasonable period specified by the FHA, the FHA may require the mortgagee approved by the FHA under the direct endorsement program or the mortgagee delegated authority under such section 256 to indemnify the FHA for the loss, or any portion thereof, if the violation was a materially contributing factor to the cause of the mortgage default. (b) Fraud or material misrepresentation If fraud or material misrepresentation was involved in connection with the origination or underwriting of a mortgage executed after enactment by the mortgagee and the FHA determines that at or before the time of loan closing such mortgagee knew or should have known, based on the information then reasonably available to such mortgagee, of the fraud or material misrepresentation such that the mortgage loan should not have been approved and endorsed for insurance, the FHA shall require the mortgagee approved by the FHA under the direct endorsement program or the mortgagee delegated authority under such section 256 to indemnify the FHA for the loss, or any portion thereof, if the fraud or material misrepresentation was a materially contributing factor to the cause of the mortgage default. (c) Appeals process The FHA shall, by regulation, establish an appeals process for mortgagees to appeal indemnification determinations made pursuant to subsection (a) or (b). (d) Requirements and procedures The FHA shall issue regulations establishing appropriate requirements and procedures governing the indemnification of the FHA by the mortgagee, including public reporting on— (1) the number of loans that— (A) were not originated or underwritten in accordance with the requirements established by the FHA