More that a thousand actions reported against Federal Housing Administration mortgagees included the loss of FHA approval by more than 900 approved lenders. One of the actions was a $700,000 settlement with Citigroup Inc.’s mortgage unit. Several other actions were tied to the improper use of government logos on the mortgagees’ Web sites.
The U.S. Department of Housing and Urban Development today reported recent administrative actions by its Mortgagee Review Board against HUD-approved mortgagees. Such reporting is required by Section 202(c) of the National Housing Act.
The report reflected actions against more than a thousand mortgagees between July 10, 2008, and March 18, 2010, including 905 mortgagees who lost approval for one year because they didn’t meet HUD’s annual re-certification requirements.
Another 147 mortgagees faced a $3,500 civil-money penalty because they didn’t meet the deadline on annual re-certification requirements. Each of the 147 companies is in compliance now and did not admit fault or liability.
One of the actions was a settlement with CitiMortgage Inc. on Feb. 17.
The O’Fallon, Mo.-based lender — which didn’t admit fault or liability — agreed to a $700,000 administrative payment.
According to HUD, CitiMortgage failed to report all delinquent loans by the fifth business day of the following month. It also “failed to correct fatal errors that resulted from its monthly reporting to HUD’s Single Family Default Monitoring System.”
In addition, the housing agency said CitiMortgage didn’t comply with HUD’s and FHA’s default-servicing reporting requirements as a result of being late submitting the report. HUD noted that the mortgagee didn’t “fully implement its quality control for oversight over this functional area.”
A spokesman for Citigroup wasn’t immediately able to provide a statement.
(In a statement from Citi after this story was published, the company blamed “a computer programming error” for a data reporting issue that “has been fully addressed” and resulted in no financial losses.)
In Baltimore, Equitable Trust Mortgage Corp. agreed to a settlement without admitting fault or liability. The agreement calls for a $277,500 civil money penalty and $147,590 in refunds of broker fees to borrowers.
“Equitable failed to comply with HUD’s requirements concerning principal-authorized agent relationships by permitting loans to close in the name of an authorized agent,” the filing said. “Equitable failed to comply with HUD’s requirements when it charged borrowers a broker fee for loans it originated and also charged an origination fee, thus receiving a total loan origination fee in excess of the fee permitted by HUD.”
A $413,500 civil money penalty will be paid by Franklin First Financial LTD based on a March 23 settlement with HUD. The lender will also reimburse fees to 78 borrowers and indemnify HUD on 31 mortgages.
HUD claims the Melville, N.Y.-based mortgagee failed to comply with its requirements for registration of the doing-business-as names Hancock First Mortgage Bankers, Kennedy First Mortgage Bankers, Presidents First Mortgage Bankers and Senior Funding Group. Franklin First is also accused of improperly using HUD’s seal on its Web site and failing to ensure applications were taken and processed by its employees.
Franklin First didn’t document how stable income was or the source of closing funds, and loans with excessive debt-to-income ratios didn’t have enough compensating factors, HUD said. Loans were approved without adequately explaining derogatory credit. Excessive and impermissible fees were charged, while discrepancies on loan documents were not resolved. QC standards were also not adequate.
|Mortgagee||Location||Date||Docket No.||Action||Amount||Alleged Actions|
|Academy Mortgage Corp.||Sandy, Utah||March 12||10-1030-MR||Settlement agreement.||$30,000||Improperly used official HUD seal on Web site which appeared to be owned & endorsed by HUD.|
|Action Mortgage Corp.||Cranston, R.I.||Jan. 25||10-1015-MRW||Notice of Administrative Action placing on six months’ probation.||$7,000||Used official HUD Seal on Web site & improperly implied affiliation, connection or authorization from HUD.|
|Americare Investment Group Inc. d/b/a Premier Capital Lending||Arlington, Texas||Jan. 25||10-1629-MR||Notice of Administrative Action permanently withdrawing FHA approval.||$0||Failed to comply with terms of an Oct. 9, 2009, agreement.|
|Assurity Financial Services||Englewood, Colo.||April 20||09-9552-MR||Settlement agreement requires civil money penalty.||$7,500||failed to implement a QC plan and conduct QC reviews as required by HUD and FHA.|
|Automated Finance Corp.||Calabasas, Calif.||Oct. 30, 2009||09-9825-MR||Notice of Administrative Action permanently withdraws FHA approval.||$0||Mortgagee closed only office approved by HUD and failed to notify HUD.|
|CitiMortgage Inc.||O’Fallon, Mo.||Feb. 17||10-1630-MR||Settlement.||$700,000||Failed to report all delinquent loans no later than fifth business day of following month; failed to correct fatal errors resulting from Single Family Default Monitoring System; failed to comply with default servicing requirements; failed to fully implement QC for oversight.|
|Cooper and Shein, LLC d/b/a Great Oak Lending Partners||Timonium, Md.||Jan. 25||10-1035-MR||Notice of Administrative Action places mortgagee on six months’ probation.||$11,000||Improperly used simulated government form and seal to imply that HECM correspondence was from or endorsed by HUD/FHA. Also misrepresented HUD program requirements in an ad that said HECM recipients were “entitled” to monthly benefits.|
|Direct Lending Inc.||Livonia, Mich.||Oct. 30, 2009||09-9303-MR||Notice of Administrative Action permanently withdrawing FHA approval.||$0||Failed to notify HUD that business licenses had become inactive and revoked.|
|Equitable Trust Mortgage Corp.||Baltimore||Dec. 14, 2009||09-9604-MR||Settlement includes civil money penalty and a refund of broker fees charged to borrowers.||civil penalty: $277,500 refund: $147,590||Failed to comply with requirements on principal-authorized agent relationships by permitting loans to close in the name of an authorized agent & charging excessive origination fee.|
|Federal Guaranty Mortgage Co.||Pembroke Pines, Fla.||Oct. 30, 2009||09-9823-MR||Notice of Administrative Action permanently withdrawing FHA approval.||$0||Closed office & failed to notify HUD.|
|Financial Mortgage USA Inc.||Honolulu||Oct. 30, 2009||07-7035-MR||Notice of Administrative Action permanently withdrawing FHA approval.||$97,500||Did not implement HUD-required QC plan, failed to provide “clear and effective separation” with life insurance identity & failed to comply with counseling requirements.|
|Franklin First Financial LTD||Melville, N.Y.||March 23||09-9822-MR||Civil money penalty, reimbursement to 78 borrowers, indemnify HUD on 31 loans.||$413,500||Failed to comply with HUD’s registration requirements on DBAs, improper use of HUD seal, failed to adequately explain derogatory credit, didn’t adequately document income & assets; excessive DTI ratios; excessive and impermissible fees; missed QC deadlines and didn’t have adequate QC plan.|
|Home Mortgage Inc.||Burr Ridge, Ill.||Jan. 25||10-1632-MR||FHA approval suspended pending outcome of federal indictment proceeding.||$0||CEO with 25% ownership indicted for warehouse fraud & HUD wasn’t notified.|
|Ideal Mortgage Bankers, Ltd. d/b/a Lend America||Melville, N.Y.||Nov. 30, 2009||09-9787-MR||Notice of Administrative Action permanently withdrawing FHA approval.||$512,500||Multiple violations.|
|Ikon Mortgage Lenders Inc.||Ft. Lauderdale, Fla.||Nov. 30, 2009||09-9910-MR||Notice of Administrative Action permanently withdrawing FHA approval.||$0||Closed its only approved office & failed to notify HUD.|
|Jett Financial Services Inc.||San Diego||Oct. 30||09-9845-MR||Notice of Administrative Action permanently withdrawing FHA approval.||$0||Closed its only approved office & failed to notify HUD.|
|Liberty State Finance LLC||Parsippany, N.J.||Nov. 30, 2009||09-9560-MR||Notice of Administrative Action permanently withdrawing FHA approval.||$0||2 employees had already been debarred by HUD, 1 for fraud.|
|Meridian Lending||Monroe, Ga.||April 21||09-9914-MR||Notice of Administrative Action withdrawing FHA approval for 1 year.||$0||Spouse added to title of closed loan without regard for debts and overall creditworthiness, inadequate QC & didn’t notify HUD home office closed.|
|Nations Direct LLC||Irvine, Calif.||Dec. 1, 2009||08-8099-MR||Civil penalty settlement.||$3,500||Used official HUD logo on Web site.|
|North Shore Financial Inc.||Meadow, N.Y.||Nov. 30,2009||09-9623-MR||Notice of Administrative Action permanently withdrawing FHA approval.||$0||Non-employees and mortgage brokers processed loans because had no employees, didn’t respond to HUD OIG requests.|
|Paramount Bond Mortgage Company Inc.||St. Louis||March 29||09-9262-MR||Settlement for civil penalty and indemnification on 9 loans.||$68,500||Didn’t ensure employees were exclusive with no outside mortgage jobs, failed to provide adequate loan file documentation.|
|Premiere Service Mortgage Corp.||Westchester, Ohio||Oct. 30, 2009||09-9001-MR||Notice of Administrative Action permanently withdrawing FHA approval.||$0||Closed approved offices without notifying HUD.|
|Premium Capital Funding LLC d/b/a TopDot Mortgage||Jericho, N.Y.||Jan. 25||09-9001-MR||Notice of Administrative Action permanently withdrawing FHA approval.||$674,000||Inadequate QC, failure to adequately document loan files, used non-FHA appraiser.|
|PrimeWest Mortgage Corp.||Lubbock, Texas||Feb. 2||09-9613-MR||Civil money settlement.||$168,500||Permitted 3rd party to originate and falsely certified originated by employee, inadequate QC, undocumented files & unallowable tax service fee.|
|ProMortgage Inc.||Claremore, Okla.||Jan. 25||09-9605-MR||Notice of Administrative Action permanently withdrawing FHA approval.||$124,000||Inadequate QC, prohibited branch arrangement, false certification, non-compliance with home-office operations requirements, failure to report W-2s, failure to process VOEs as required.|
|Strategic Mortgage Corp.||Oklahoma City||Jan. 25||09-9606-MR||Notice of Administrative Action permanently withdrawing FHA approval.||$71,000||Using independent contractors for LOs, improperly disclosed & charged broker fee and origination fee,|
|Sun West Mortgage Company Inc.||Cerritos, Calif.||Dec. 1, 2009||09-9806-MR||Civil-money settlement & letter of reprimand.||$10,000||Didn’t have necessary HECM state license & failed to notify HUD of cease-and-desist order.|
|VanDyk Mortgage Corp.||Grand Rapids, Mich.||Dec. 1, 2009||09-9602-MR||Civil-money settlement & indemnification on 2 loans.||$7,500||Failed to ensure employees processed FHA loans didn’t comply with requirements for loans to employees.|
|Mortgagee||Location||Date||Docket No.||Action||Amount||Alleged Actions|