Chase Branches Loses FHA Approval

The latest companies to see mortgage lending branches lose Federal Housing Administration approval include JPMorgan Chase & Co. and a Colorado-based wholesale lender. Two mortgage branch operations were also among the impacted. In all, more than 30 mortgagees were recenlty terminated or lost their underwriting approval authority.

The origination approval agreements of 25 mortgagees have been terminated since May, a public filing today from the U.S. Department of Housing and Urban Development said.

HUD said that the default and claim rates of originations from the terminated mortgagees have been more than 200 percent higher than the average in HUD’s corresponding field offices during the past two years. Their rates also exceed the national average.

Only the branch terminated by HUD is impacted. Terminated branches can submit loans that were closed or approved before the termination. Under some conditions, terminated mortgagees can apply for a reinstatement after six months. Correspondents, however, cannot request a reinstatement after this year.

Among the terminations were two at JPMorgan Chase Bank, N.A., on July 11. While the mortgagee branch address for the Chase branch was shown in Garden City, N.Y., the HUD office jurisdictions were Atlanta and New Orleans.

A Chase spokesman declined to comment on the terminations.

An Allied Home Mortgage Capital Corp. branch within the Baltimore HUD office jurisdiction lost its approval on May 27. In August, James Hodge, chief executive officer of the mortgage branch operator, explained in a telephone interview that a Maryland branch had lost approval.

Companies with branches to lose FHA approval that fell within HUD’s Atlanta office’s realm included Access National Mortgage Corp. in Reston, Va., and Real Estate Mortgage Network Inc. in River Edge, N.J.

In the Baltimore HUD office, Key Financial Corp. of Clearwater, Fla., lost its origination agreement. HUD’s Boston office terminated another Access National branch, as did the Greensboro HUD office. First Mortgage Group Inc. in Decatur, Ala., lost approval for HUD’s Birmingham office.

In the Caribbean, EMI Equity Mortgage Inc., in San Juan, P.R., was terminated, while East Dundee, Ill.-based Fox Valley Mortgage Group lost its approval from HUD’s Chicago Office. In Columbus, Ohio, Midwest Funding Group lost its approval for HUD’s office in that city.

Residential Mortgage Corp. in Bowling Green, Ky., lost its origination approval for HUD’s Louisville office, and Summit Funding of Sacramento, Calif., was terminated by HUD’s Fort Worth office.

HUD’s Memphis office terminated Olive Branch, Miss.-based American First Mortgage LLC. Preferred Lending Group LLC out of Maple Grove, Minn., lost its Minneapolis HUD approval.

1st Continental Mortgage Inc. of Ft. Lauderdale, Fla., lost its approval in the Tampa HUD Office, and the Washington HUD office terminated Amerinet Financial LLC in Upper Marlboro, Md., and Dell Franklin Financial LLC in Columbia, Md. — as did the HUD office in Richmond.

Hanover Funding Inc. in Fairfield, N.J., lost its approval for HUD’s Newark office, as did Mortgage Plus Inc. in Clark, N.J.

The Phoenix HUD office terminated Pacific Coast Mortgage Inc. in Scottsdale, Ariz.

HUD also reported that another six mortgagees lost their direct endorsement approval. Impacted mortgagees cannot underwrite loans but can apply for reinstatement after six months.

“For quarterly review period ending Dec. 31, 2009, HUD is terminating the DE Approval of mortgagees whose default and claim rate exceeds both the national rate and 300 percent of the field office rate,” the filing said.

Among the mortgagees to lose direct endorsement approval was Universal Lending Corp. in Denver. HUD offices in Houston and Kansas City terminated the authority. Universal Lending operates a wholesale lending division.

Also losing direct endorsement approval for branches were Southlake, Texas-based Alacrity Lending Co.; Great Neck, N.Y.-based Cambridge Home Capital LLC; Freedom Mortgage Corp., a mortgage branch operator out of Mt. Laurel, N.J.; and Pierce Commercial Bank in Tacoma, Wash.