Nearly 100 FHA Mortgagees Face HUD Actions

A failure to comply with HUD requirements on quality control plans, distressed loan servicing and late fees and inspection fees led to a $475,000 civil money penalty against LoanCare LLC.

The subsidiary of Fidelity National Financial Inc. is indemnifying HUD for losses on one loan, refunding loss mitigation incentive fees to HUD and refunding improperly charged late fees and inspection fees.

The April 2014
administrative action against LoanCare was among many disclosed in a public filing Monday that have been taken by HUD’s Mortgagee Review Board against Federal Housing Administration mortgagees.

With JP Morgan Chase Bank, N.A.’s, $614 million settlement announced in February 2014, HUD received $564.4 million. HUD has provided an administrative release to Chase.

In May 2014, U.S. Bancorp disclosed that its origination and servicing practices were being investigated. A $200 million settlement followed, of which HUD received $144,199,970. HUD’s Mortgagee Board voted in June 2014 to provide an administrative release to the Minneapolis-based bank.

A $968 million settlement announced in June 2014 between SunTrust Mortgage Inc. and the government yielded $300 million for HUD and resolved allegations that SunTrust violated government-insured lending policies and used unacceptable servicing and foreclosure practices.

HUD’s Mortgagee Board voted to release administrative claims it might have against SunTrust.

Gateway Bank Mortgage Inc. agreed on July 3, 2014, to pay a $98,500 civil penalty to settle allegations that it didn’t comply with HUD’s quality control requirements, failed to conduct pre-endorsement reviews and neglected to retain loan documents. The Raleigh, North Carolina-based company is also accused of failing to properly verify and document gift funds — though it didn’t admit fault or liability.

A total of 17 mortgagees faced civil money penalties, withdrawals of FHA approval, suspensions, probations, reprimands, and administrative payments.