[Federal Register Volume 59, Number 96 (Thursday, May 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12207]


[[Page Unknown]]

[Federal Register: May 19, 1994]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner
[Docket No. N-94-3772; FR-3712-N-01]

 

Mortgagee Review Board Administrative Actions

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.

ACTION: Notice

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SUMMARY: In compliance with Section 202(c) of the National Housing Act, 
notice is hereby given of the cause and description of administrative 
actions taken by HUD's Mortgagee Review Board against HUD-approved 
mortgagees.

FOR FURTHER INFORMATION CONTACT: William Heyman, Director, Office of 
Lender Activities and Land Sales registration, 451 Seventh Street, SW., 
Washington, DC 20410, telephone (202) 708-1824. The Telecommunications 
Device for the Deaf (TDD) number is (202) 708-4594. (These are not 
toll-free numbers).

SUPPLEMENTARY INFORMATION: Section 202(c)(5) of the National Housing 
Act (added by Section 142 of the Department of Housing and Urban 
Development Reform Act of 1989 (Pub.L. 101-235, approved December 15, 
1989) requires that HUD ``publish in the Federal Register a description 
of and the cause for administrative action against a HUD-approved 
mortgagee'' by the Department's Mortgagee Review Board. In compliance 
with the requirements of Section 202(c)(5), notice is hereby given of 
administrative actions that have been taken by the Mortgagee Review 
Board from January 1, 1994 through March 31, 1994.

1. Independence Mortgage Corporation of America, Inc., Winter Park, 
Florida

    Action: Proposed Settlement Agreement that includes indemnification 
to the Department for claim losses in connection with ten improperly 
originated loans.
    Cause: A HUD Office of Inspector General audit that cited the 
company for violations of HUD-FHA program requirements that included: 
(1) failure to conduct face-to-face interviews with mortgagors; (2) 
failure to verify downpayments; (3) miscalculation of the maximum 
insurable mortgage amount and required borrower investment; (4) failure 
to properly verify and analyze mortgagors' assets, liabilities and 
income; and (5) failure to ensure the accuracy of certifications made 
to HUD-FHA.

2. Interstate Plus Mortgage, Inc., San Diego, California

    Action: Settlement Agreement that includes the cancellation of HUD-
FHA insurance on nine improperly originated loans under the Title I 
program, and corrective action to assure compliance with HUD-FHA 
requirements.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
Title I property improvement program requirements that included: (1) 
failure to report loan fraud by a former loan officer; (2) accepting 
brokered loan packages; (3) ``strawbuyers'' and fraudulent 
documentation used to originate loans; (4) funding loan packages after 
learning of the fraudulent practices by a former loan officer; (5) 
failure to properly disburse loan proceeds; (6) loan officer's 
acceptance of ``kickbacks'' from loan brokers; and (7) failure to 
obtain detailed descriptions of property improvement work to be 
performed by borrowers.

3. Middle Tennessee Mortgage, Inc., Dickson, Tennessee

    Action: Proposed Settlement Agreement that includes indemnification 
to the Department for claim losses in connection with eight improperly 
originated loans, payment of a civil money penalty in the amount of 
$500 for reporting violations under the Home Mortgage Disclosure Act 
(HMDA), and corrective action to assure compliance with HUD-FHA 
requirements.
    Cause: A HUD monitoring review that cited violations of HUD-FHA 
program requirements that included: (1) failure to collect and report 
Home Mortgage Disclosure Act (HMDA) data to HUD; (2) failure to comply 
with HUD-FHA Quality Control Plan requirements; (3) failure to verify 
the source and/or adequacy of the mortgagors' funds for downpayment or 
closing costs; (4) failure to obtain documentation to properly evaluate 
the borrowers' mortgage credit risk; (5) failure to properly calculate 
the borrowers' income; (6) failure to properly credit sweat equity; and 
(7) failure to resolve the borrower's derogatory credit.

4. Home Mortgage Company d/b/a Puerto Rico Home Mortgage, Hato Rey, 
Puerto Rico

    Action: Proposed Settlement Agreement that includes payment of a 
civil money penalty in the amount of $10,000, refunds to mortgagors for 
excessive and unallowable post endorsement fees, and continued 
implementation of corrective actions to assure compliance with HUD-FHA 
loan servicing requirements.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
loan servicing requirements that included: (1) untimely quality control 
reviews; (2) deducting late fees from mortgagor's escrow accounts prior 
to existing surpluses; (3) failure to perform management reviews prior 
to foreclosure; (4) excessive and unallowable post endorsement fees; 
(5) failure to perform timely property inspections; (6) failure to 
timely notify borrowers of the availability of counseling; and (7) 
failure to meet the reporting requirements of the Single Family Default 
Monitoring System.

5. State Funding, Inc., Corona, California

    Action: Proposed Settlement Agreement that includes indemnification 
to the Department for one improperly originated loan, corrective action 
to assure compliance with HUD-FHA requirements, and payment of a civil 
money penalty in the amount of $1,000 based upon violations of Home 
Mortgage Disclosure Act (HMDA) reporting requirements, and improper use 
of brokers in originating HUD-FHA insured mortgages.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
program requirements that included: (1) failure to report Home Mortgage 
Disclosure Act (HMDA) data to HUD; (2) use of mortgage brokers to 
assist in the preparation of FHA mortgage applications; (3) payment of 
``kickbacks'' to mortgage brokers for referrals of loan applications; 
(4) submitting a delinquent loan for endorsement; and (5) failure to 
make timely refunds due mortgagors after loans had been paid in full.

6. Continental Capital Corporation, Huntington Station, New York

    Action: Letter of Reprimand and proposed civil money penalty in the 
amount of $500.
    Cause: A HUD monitoring review that cited the company for failure 
to comply with HUD-FHA reporting requirements under the Home Mortgage 
Disclosure Act (HMDA).

7. All Kern Financial Corporation, Bakersfield, California

    Action: Letter of Reprimand and proposed civil money penalty in the 
amount of $500.
    Cause: A HUD monitoring review that cited the company for failure 
to comply with HUD-FHA reporting requirements under the Home Mortgage 
Disclosure Act (HMDA).

8. Discount Financial Corporation, Longwood, Florida

    Action: Letter of Reprimand and proposed civil money penalty in the 
amount of $500.
    Cause: A HUD monitoring review that cited the company for failure 
to comply with HUD-FHA reporting requirements under the Home Mortgage 
Disclosure Act (HMDA).

9. First Guaranty Financial Corporation, Lake Elsinore, California

    Action: Proposed Settlement Agreement that includes indemnification 
to the Department for one improperly originated loan, and payment of a 
civil money penalty in the amount of $1,000.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
requirements that included: failure to verify a mortgagor's assets in 
the origination of one loan, failure to implement a Quality Control 
Plan, and failure to comply with Home Mortgage Disclosure Act (HMDA) 
Reporting Requirements.

10. Lane Mortgage Company, Inc., Lynwood, Colorado

    Action: Proposed Settlement Agreement that includes indemnification 
to the Department for one improperly originated loan, and payment of a 
civil money penalty in the amount of $500.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
requirements that included failure to comply with HUD-FHA reporting 
requirements under the Home Mortgage Disclosure Act (HMDA), and failure 
to properly establish a mortgagor's effective income in the origination 
of one loan.

11. Federated Mortgage Company, Inc., West Covina, California

    Action: Letter of Reprimand and proposed civil money penalty in the 
amount of $1,000.
    Cause: A HUD monitoring review which cited the company for failure 
to implement a Quality Control Plan, and failure to comply with the 
Home Mortgage Disclosure Act (HMDA) Reporting Requirements.

12. Mortgage Associates, Inc., Lakeland, Florida

    Action: Proposed Settlement Agreement that includes indemnification 
or a buydown of one overinsured mortgage in the event that additional 
documentation is not submitted, and payment of a civil money penalty in 
the amount of $1,000.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
requirements that included: (1) one overinsured mortgage; (2) failure 
to implement a Quality Control Plan; and (3) failure to comply with 
Home Mortgage Disclosure Act (HMDA) requirements.

    Dated: May 13, 1994
Nicolas P. Retsinas
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 94-12207 Filed 5-18-94; 8:45 am]
BILLING CODE 4210-27-P