Among several mortgagee actions disclosed by the Department of Housing and Urban Development was a settlement for more than $1 million with Homeward Residential Holding Inc. Flagstar Bank, FSB, also agreed to a settlement. While many of the latest actions involve new originations, mortgagees were also penalized for servicing violations.
HUD’s Mortgagee Review Board voted to withdraw the Federal Housing Administration approval of 138 FHA mortgagees for a period of one year, according to a public filing Thursday. The actions were taken based on allegations that the lenders weren’t in compliance with HUD’s annual recertification requirements.
Another seven lenders that weren’t on time in complying with HUD’s recertification requirements agreed to settlements that required them to pay a $3,500 or $7,500 civil money penalty.
The actions were taken by HUD in compliance with the National Housing Act.
HUD agreed to a $1.2 million settlement with Homeward Residential on Sept. 14, 2012. The Coppell, Texas-based company was acquired by a subsidiary of Ocwen Financial Corp. in December 2012.
Homeward, which was previously known as American Home Mortgage Servicing Inc., “submitted or caused to be submitted false information to HUD in relation to 63 mortgagee record changes, failed to reconcile its portfolio data and allowed HUD records to incorrectly identify American Home Mortgage Servicing Inc. as the holder of 97 FHA-insured mortgage loans, and submitted false information to HUD on 133 claims for FHA insurance benefits and, in 90 instances, claimed benefits for ineligible holders of record,” according to HUD’s notice.
A $1,009,028 settlement with Jersey Mortgage Co. on July 16, 2012, was the result of loan approvals that weren’t justified or documented.
Failure to remit 200 up-front mortgage insurance premiums within 10 days of closing and failure to honor two indemnification agreements prompted a $257, 372 settlement with Mortgage Now Inc.
HUD said Flagstar Bank agreed to an $85,150 settlement because the Troy, Mich.-based company was either slow in remitting FHA mortgage insurance premiums or didn’t notify HUD about contract termination with 15 days.
Another settlement between HUD and Flagstar was reached on Nov. 21, 2012, and requires Flagstar to pay $129,677 in penalties and indemnification. Flagstar didn’t meet FHA servicing requirements.
Academy Mortgage Corp. agreed to a $75,000 settlement on April 27, 2012. The Sandy, Utah, mortgagee failed to notify HUD that it was the subject of multiple state regulatory actions and sanctions. Academy also submitted false certifications in connection with its annual renewal for the years 2009 through 2011.
A $59,000 settlement with Capitol Federal Savings Bank on June 29, 2012, resulted from employing or retaining a debarred director and making false certification in 2009, 2010 and 2011.
Failing to engage in loss mitigation and neglecting to retain required mitigation documentation cost Cenlar Federal Savings Bank a $32,500 civil money penalty.
In Anchorage, Alaska, the First National Bank of Alaska agreed to a $23,300 settlement on Oct. 30, 2012, over its failure to maintain a quality control plan First National also failed to meet FHA servicing requirements and provide required materials to delinquent borrowers..
American Financial Resources Inc., which operates third-party lender AFR Wholesale, agreed to a $17,000 settlement with HUD because it didn’t document income or qualify a borrower, didn’t resolve discrepancies before submitting loans and charged excessive or unreasonable fees. The agreement also requires the lender to indemnify HUD on losses tied to two FHA-insured loans and refund excessive origination fees.
Late premium remittances cost People’s United Bank $15,000 in a Jan. 22 settlement.
A $12,000 civil money penalty was issued against Community West Mortgage LLC on June 14, 2012 because it failed to implement a quality control plan. Community West also allowed non-employees and non-W-2 employees to originate FHA loans and failed to require employee signatures. A branch of the Lakewood, Colo., firm had been terminated by HUD in February 2010.
An $8,100 settlement was reached with ISB Mortgage Company LLC on March 2, 2012, because of late remittances of mortgage insurance premiums.
A misrepresentative or misleading advertisement or public solicitation prompted First Liberty Financial Group LLC to agree to a $7,500 settlement with the mortgagee board on July 16, 2012. The Owensboro, Ky., company is on probation for six months.
For a period of one year, HUD has withdrawn the FHA approval of First Reverse Financial Services LLC because it failed to notify HUD that it was involuntarily dissolved by the state of Illinois.
Mac-Clair Mortgage Corp. lost its FHA approval on April 12, 2012, because of delayed remittances on FHA premiums.
FHA approval was permanently withdrawn for Miami-based Nationwide Home Loans Inc., which failed to complete its annual recertification process, let employees who were engaged in prohibited outside employment originate FHA loans and violated other FHA requirements.
Pine State Mortgage Corp. permanently lost FHA approval on June 15, 2012, over a host of violations. It lost its direct endorsement approval in November 2010, while it was one of 15 mortgagees subpoenaed by HUD in January 2010 because of poorly performing originations.
HUD violations also cost Cockeysville, Md.-based U.S. Mortgage Finance Corp. its FHA approval on June 12, 2012.
