Following a bloodbath last week when the U.S. Department of Housing and Urban Development announced actions against more than 200 mortgagees, the agency reported five more firms that faced further actions.
The Federal Housing Administration’s Mortgagee Review Board withdrew the FHA approval of Strategic Mortgage Corp., according to letter No. 10-019 from HUD today. In addition, a $71,000 civil penalty was issued.
The loss of the company’s approval was permanent.
Strategic failed to comply with employment requirements, charged unallowable or excessive fees and failed to disclose all fees on the Good Faith Estimate, HUD said. It also submitted a false certification to HUD on an FHA loan.
Additionally losing its FHA approval was ProMortgage Inc., which is accused of lacking adequate quality control, engaging in a prohibited branch arrangement and making false certifications on the HUD/VA Addendum to the Uniform Residential Loan Application. ProMortgage, which was hit with a $124,000 penalty, allegedly failed to comply with home office operation requirements and failed to properly report employee compensation. HUD said ProMortgage allowed borrowers to provide their own verification of employments — creating an opportunity for mortgage fraud.
“Verification of employment must be submitted directly to the lender by the employer,” HUD said.
Americare Investment Group Inc., which does business as Premier Capital Lending, breached the terms of an October 2009 settlement for $124,000 by failing to make any of the required monthly payments toward the settlement amount, according to today’s letter.
Last week, HUD said in a public filing that it withdrew the FHA approval of 67 mortgagees, issued a $3,500 civil penalty against 41 firms and issued administrative fees against 104 mortgagees. Americare was listed among the mortgagees in last week’s announcement.
A fourth firm, Home Mortgage Inc., saw its FHA approval suspended because it retained its chief executive officer despite his being indicted in June 2009 in a scheme involving 450 fictitious loans, HUD said. The Burr Ridge, Ill.-based company’s CEO plead guilty to bank fraud earlier this month.
The suspension of Home Mortgage, which also failed to meet FHA’s annual re-certification requirements, will last six months or until a federal court rules on a related matter, the statement said.
HUD said Cranston, R.I.-based Action Mortgage Corp. was placed on six months’ probation because of misleading advertising practices. The Mortgagee Review Board voted to impose a $7,000 monetary penalty on Action.
Cooper and Shein LLC was also placed on six months’ probation over misleading advertising practices, HUD said. The Timonium, Md.-based company, which also operates as Great Oak Lending Partners, faced an $11,000 monetary penalty.
Appeals can be presented within 30 days, but the actions will remain in force.
In a separate letter, HUD NO. 10-018, the agency said that the Mortgagee Review Board withdrew Premium Capital Funding LLC’s FHA approval. In addition, the Jericho, N.Y.-based lender was hit with a $674,000 penalty.
Premium Capital, which does business as TopDot Mortgage, additionally is being terminated as a Ginnie Mae issuer, and its $181 million Ginnie portfolio is being transferred to LoanCare Servicing Center Inc.
The actions were taken as a result of “numerous and egregious violations of FHA requirements, including failure to document borrowers’ income, evaluate borrowers’ creditworthiness, and approving loans with grossly excessive debt-to-income ratios without compensating factors to justify approval,” the letter stated.
An ongoing HUD investigation will target individuals who participated in Premier Capital’s violations of FHA requirements.
Premier Capital was among the firms listed in last week’s filing.
