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| In what the U.S. Department of Housing and Urban Development described as “the largest amount ever collected in the 30-year history of HUDs Mortgagee Review Board,” KB Home Mortgage Co. has settled alleged FHAÂ violations.
The government agency announced yesterday that it has agreed to a $3.2 million settlement with the mortgage unit of homebuilding giant KB Homes over 13 alleged violations. KB Home Mortgage, which is slated to be acquired by Countrywide Financial Corp., is accused of using poor underwriting practices. HUD said the violations included approving ineligible borrowers for loans, using overstated income or understated debts and using unverified down payment sources. “Following a review of KB Home Mortgage’s FHA activities by HUDs Quality Assurance Division, the (mortgagee review board) decided to take action,” the agency’s announcement said. “This settlement sends a strong message that FHA will not tolerate violations of its requirements, especially when they can cause homeowners to default on their mortgages,” Brian D. Montgomery, chairman of HUDs Mortgagee Review Board, said in the statement. Other members of the board include HUDs General Counsel, Ginnie Mae’s president and the director of the enforcement center. KB Home did not immediately respond to MortgageDaily.com’s request for a statement. |
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Sam Garcia has been in mortgage lending since 1980, and is publisher of MortgageDaily.com, MortgageChronicle.com, FraudBlogger.com and CloserBlog.com. email:Â SamGarcia@MortgageDaily.com |
