During the final two months of last year, 15 Federal Housing Administration lenders lost their ability to originate government-insured mortgages because of poorly performing production. Several of the firms recently faced other FHA actions.
The origination approval agreements were terminated as part of the Credit Watch Termination Initiative. After such an event, the mortgagee can no longer originate FHA-insured loans.
“The agreement may be terminated on the basis of poor performance of FHA-insured mortgage loans originated by the mortgagee,” the Department of Housing and Urban Development stated in a public filing Monday.
A mortgagee can lose approval if its default and claim rate exceeds by at least 200 percent both the national and field office rates.
Terminated mortgagees can still submit for endorsement loans that were closed or approved before the termination. All other FHA production can only be closed by transferring the loans to an approved FHA lender.
Among mortgagees to lose their origination agreements was a West Bloomfield, Mich., office of Birmingham Bancorp Mortgage Corp. The agreement was terminated on Nov. 15.
Birmingham’s office in Birmingham, Mich., lost its FHA approval in June 2010 for five years for allegedly failing to honor the terms of six executed indemnification agreements after it failed to remit payment — though HUD withdrew the termination the next month and accepted a settlement offer from Birmingham of $815,913. In August 2008, Birmingham settled with HUD for $3,000.
Birmingham was among 15 “poor performing companies” to face a subpoena in June 2010 from HUD’s inspector general.
HUD has been known to list other locations, such as the headquarters address, instead of the actual mortgagee branch that was terminated.
Also on the list was a Baltimore office of Equitable Trust Mortgage Corp., which was terminated also on Nov. 15.
Equitable settled with HUD in December 2009 allegations it overcharged 37 borrowers. The settlement included a $277,500 civil money penalty and $147,590 in broker-fee refunds to borrowers.
A Fishers, Ind., branch of Freedom Mortgage Corp. lost its origination agreement on Nov. 15.
Freedom, a MortgageDaily.com advertiser, lost direct endorsement approval authority at two branches last year.
Two Equity Source Home Loans LLC offices in Lakewood and Morganville, N.J., were terminated on Dec. 14.
Allegations of implying it was endorsed by FHA and HUD led to a $7,000 civil money penalty against Equity Source in June 2010.
A Beltsville, Md., branch of Benefit Funding Corp. had its origination agreement terminated on Nov. 15.
Benefit Funding lost its FHA direct endorsement approval authority last year.
Signature One Mortgage Inc. saw its Las Vegas mortgagee agreement terminated on Nov. 15.
Signature One was among unauthorized companies listed in November 2010 by the Kansas Division of Consumer and Mortgage Lending. The public notice indicated that the company’s license had been revoked.
Branches of other mortgagees to lose FHA approval during November are listed in the following table.
| Mortgagee Name | Branch Location | Termination Effective Date |
| Access Mortgage Services Inc. | 97 Main St., Ste 209, Woodbridge, NJ 07095 | 11/23/2010 |
| Anchor Mortgage | 6260 S Rainbow Blvd., Ste 100, Las Vegas, NV 89118 | 11/16/2010 |
| Dedicated Mortgage Associates LLC | 225 Derry Rd., Hudson, NH 03051 | 11/15/2010 |
| First Performance Mortgage Corp. | 1221 Lake Dr., SE., Ste 103, Bessemer, AL 35022 | 11/15/2010 |
| Homeland Lending Inc. | 105 S Wheeler St., Ste 300, Plant City, FL 33563 | 11/15/2010 |
| Metro Finance Corp. | 30 S Stolp Ave., Ste 314, Aurora, IL 60506 | 11/15/2010 |
| Moncor Inc. | 4660 Wadsworth Blvd., Wheat Ridge, CO 80033 | 11/16/2010 |
| MVB Mortgage Corp. | 24400 Northwestern Hwy., Southfield, MI 48075 | 11/16/2010 |
| Valor Financial Services LLC | 1911 Rohlwing Rd., Ste A, Rolling Meadows, IL 60008 | 11/16/2010 |
The terminated mortgagees can apply for reinstatement after six months if an independent analysis by a qualified certified public accountant indicates that the problem at issue was resolved.
