The Federal Housing Administration announced the suspension of a Maryland mortgage firm over allegations of overcharging borrowers and failing to disclose yield spread premiums.
The agency said Equitable Trust Mortgage Corp. can no longer originate and underwrite FHA-insured mortgages. The suspension will last a minimum of six months.
The mortgage broker, which says on its Web site that it is licensed in Pennsylvania and Virginia, claims to be a full-service renovation lender.
FHA said Equitable overcharged 37 borrowers. While the U.S. Department of Housing and Urban Development limits origination fees to 1 percent, the company reportedly charged a broker fee in addition to a 1 percent origination fee. FHA called the fees “duplicative and unreasonable.”
Minorities reportedly were overcharged 68 percent more of the time than non-minorities.
In 21 of the cases, the Baltimore broker allegedly failed to properly disclose all loan origination fees and yield spread premiums on the Good Faith Estimates.
FHA noted that the company’s default rate exceeds the national average.
An appeal to the suspension can be filed with an administrative law judge within 30 days.
Equitable didn’t immediately respond to a request for a statement.
