A pair of firms operating in the Lone Star State have lost approval to originate government-insured mortgages because of allegedly charging illegitimate fees.
Back in June 2013, R.H. Lending Inc.
agreed to a $295,000 settlement with the Department of Housing and Urban Development.
The Colleyville, Texas-based company was accused of not following the required guidelines on construction-permanent loans insured by the Federal Housing Administration.
It also allegedly charged excessive unearned fees.
As part of that settlement, R.H. Lending agreed to indemnify HUD.
In June 2014, HUD’s
Mortgagee Review Board heard a case against R.H. Lending, which was accused of multiple underwriting violations on manufactured housing loans.
“In this case, HUD alleged that the lender had taken part in a scheme to disguise fees charged to borrowers as legitimate construction fees, but for which no work was performed, thus creating an inflated mortgage for the borrowers and increasing FHA’s exposure to loss,”
HUD said in a statement Monday.
R.H. Lending, which didn’t admit to doing anything wrong, agreed to a $300,000 settlement and the permanent withdrawal of its FHA approval.
HUD additionally
debarred two of the primary players in the scheme from doing business with the federal government for seven years.
The second firm, Prosper, Texas-based American Home Free Mortgage LLC, also finances newly newly constructed manufactured housing.
HUD claims that American Home Free Mortgage paid
illegitimate fees paid to a company owned and operated by its sales manager.
The fees allegedly increased borrowers’ loan costs by an average of $12,000.
HUD additionally accused the company of
multiple quality control and annual certification violations.
American Home Free Mortgage, which also admitted to nothing, agreed to a $169,419 civil penalty and the permanent withdrawal of its FHA approval.
