Mortgage Companies Lose FHA Approval – FHA news from MortgageDaily.com
DALLAS, June 12 /PRNewswire/ A branch of the country’s largest mortgage network was among five companies to lose approval to originate FHA-insured loans, according to MortgageDaily.com, the dominant source of online news for the mortgage industry.
A Georgia branch of Allied Home Mortgage Capital Corp., which says it is “the largest branch network company in America,” as well as four Denver-area companies mentioned in the HUD notice, were subject to termination because loans they originated had excessive default rates.
But the TOTAL Scorecard used by HUD to evaluate lenders was recently blasted in a report to Congress.
The General Accountability Office, prompted by recent questions and concerns regarding the effectiveness of the scorecard, said in the report, “Data that FHA and its contractors used to develop TOTAL were 12 years old by the time FHA implemented the scorecard.”
But HUD responded that its TOTAL was working exactly as envisioned.
The agency recently told its lenders that downpayment gifts from charitable organizations that will lose or give up federal tax-exempt status from the IRS will no longer be acceptable.
FHA servicers were notified they will be required to report FHA-insured loans past due 30 days as of the last day of the month. HUD said mortgagees can continue to report only 90-day delinquent loans until the September 2006 cycle.
Fifth Third Bank settled HUD charges it denied a mortgage because of race.
HUD said its investigation revealed Fifth Third denied a mortgage to a Kentucky African-American woman even though the Cincinnati-based bank approved other applicants with worse credit.
The bank reportedly denied the allegations.
Columbia National Inc. agreed to pay HUD $800,000 to settle civil allegations of fraud.
In 1999, before being acquired by American Home Mortgage Investment Corp., Columbia employees were fired for allegedly using phony verifications.
In an SEC filing, American Home said approximately 60 questionable loans were created between 1997 and 1999, and the government was notified, the office was closed and the employees were fired.
Read complete FHA, VA, HUD and Ginnie Mae news at https://www.mortgagedaily.com/GovTab.asp
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