Millions of dollars in recent settlements were disclosed with several firms for not meeting Federal Housing Administration mortgagee requirements. Over a hundred firms were penalized for late recertification reports.
Settlements were reached with several FHA mortgagees
for a variety of reasons including allegedly falsely certifying loans and failing to perform quality control reviews on defaulted loans.
Other alleged violations included not reporting acquisitions of other companies,
failing to notify the Department of Housing and Urban Development when the companies or employees were sanctioned by states or entered consent orders, and failing to show correct branch identification numbers on loans.
Those details were revealed in a
Federal Register filing by HUD entitled Mortgagee Review Board: Administrative Actions. The filing was made in compliance with the National Housing Act.
In some cases, indictments of employees weren’t reported, while others involved failing to submit audited financials on time or failing to report a net operating loss.
In addition, some companies’ didn’t follow FHA appraisal guidelines, didn’t include all liabilities in qualifying loans, and failed to verify and adequately document the borrowers’ source of funds for closing. Approving ineligible borrowers and failing to obtain payoff statements were also among the violations.
The settlements didn’t necessarily constitute an admission of liability or fault.
In Buffalo, New York,
Manufacturers and Traders Co. agreed in a March 2016 settlement to pay a $64 million civil money penalty. The company was accused of failing to properly originate, underwrite and conduct quality control reviews.
SecurityNational Mortgage Co. agreed in September 2016 to pay a $4.25 million penalty. SecurityNational is based in Salt Lake City.
A civil money penalty for $1.325 million was issued in April 2016 against Ross Mortgage Corp. in Troy, Michigan.
A $1 million civil money penalty was issued in October 2015 against Sandy, Utah-based RANLife Inc.
AmCap Mortgage LTD agreed to a settlement in June 2016. The
Houston-based firm agreed to pay a $262,500 civil money penalty and an additional $75,000.
Falmouth, Maine-based TD Bank Group agreed in March 2016 to a $221,000 penalty.
A $128,000 penalty was issued against Golden Empire Mortgage Inc. in August 2016. The lender is located in Bakersfield, California.
A $120,500 civil money penalty was part of an August 2016 settlement with First Heritage Financial LLC in Trevose, Pennsylvania.
Houston-based Sutherland Mortgage Services Inc. agreed to a $23,500 penalty in August 2016.
Agreeing in August 2016 to pay $17,000 each were
BancFirst in Oklahoma City and Birmingham, Alabama-based Renasant Bank.
Liberty Bank in Middletown, Connecticut, agreed in August 2016 to pay $8,500.
Little Rock, Arkansas-based Bank of England
agreed to pay $6,500.
A $5,000 penalty was issued against
First Mortgage Co. in Oklahoma City; Garden City, New York-based
Meadowbrook Financial Mortgage Bankers Corp.; and Overland Park, Kansas-based Peoples Bank.
A $3,500 civil money penalty was levied against Bloomington, Illinois-based Mortgage Services III LLC in October 2015.
The Federal Register filing additionally listed previously reported settlements with Branch Banking and Trust Co., Franklin American Mortgage Co., Freedom Mortgage Corp., HSBC Bank USA, Ocwen Loan Servicing LLC, Regions Bank and United Shore Financial Services LLC.
The filing listed
106 mortgagees that failed to comply with HUD’s annual recertification requirements in a timely manner. The firms paid civil money penalties ranging from $3,500 to $16,000.
Another 147 mortgagees
had their FHA approval withdrawn for a year due to failing to meet annual recertification requirements.
