Mortgage Daily Logo

$700k Citi Settlement Among Hundreds of HUD Actions

FHA News

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

Related Posts

Best Mortgage Lenders By Category

Best Mortgage Lenders By Category

A report based on a recent survey of consumers who were shopping for a residential loan has identified the best home lenders in a variety of categories -- including government programs, jumbo loans and online services. The 10-question survey of prospective mortgage...

Best Mortgage Lenders By Category

FHA Endorsements Edge Higher, Book of Biz Grows

Monthly residential government-insured mortgage production was nudged up, though commercial real estate endorsements plunged. The book of business continued to grow. At the end of August, the Federal Housing Administration had insurance in force on 8,622,052...

Best Mortgage Lenders By Category

FHA Endorsements Inch Up, Might Rise More

Monthly Federal Housing Administration business inched higher and might accelerate further. Delinquency turned sharply higher, and reverse mortgage production was the slowest it's been in four years. But commercial mortgage endorsements doubled. As the first half of...

Best Mortgage Lenders By Category

SF Endorsements Up, Delinquency Down at FHA

Monthly new business was moderately higher in the Federal Housing Administration's residential business, while loan performance improved. But commercial mortgage endorsements plunged. Data reported by the Department of Housing and Urban Development indicate FHA...

Best Mortgage Lenders By Category

FHA False Claims Actions Among Industry Concerns

Among the concerns shared by attendees at a recent secondary marketing conference is the legal uncertainty accompanying government-insured originations. A majority want a company-wide production management dashboard. The Mortgage Bankers Association hosted its annual...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...

Newsletter

Don’t worry, we don’t spam