[Federal Register Volume 59, Number 154 (Thursday, August 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19633]


[[Page Unknown]]

[Federal Register: August 11, 1994]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner
[Docket No. N-94-3804; FR-3758-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, 
S.W., Washington, D.C. 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 April 1, 1994 through June 30, 1994.
l. Georgia Bankers Bank, Atlanta, Georgia
    Action: Settlement Agreement that includes payment to the 
Department the amount of $252,000 and compliance with HUD-FHA loan 
origination requirements.
    Cause: Failure to properly underwrite 17 single family mortgages in 
accordance with HUD-FHA requirements. The violations of the 
Department's requirements included: failure to properly underwrite 
large investor loans; failure to obtain borrower's tax returns and 
year-to-date profit and loss statements; failure to adequately 
establish borrower's income; failure to use diligence and prudent 
lending practices in verifying borrower documentation to support 
income; and failure to adequately establish borrower's Social Security 
Number.
2. Kadilac Mortgage Bankers, Ltd., Great Neck, New York
    Action: Settlement Agreement that includes payment to the 
Department the amount of $300,000, compliance with HUD-FHA 
requirements, and a review of the company's HUD-FHA loan origination 
procedures within 120 days of the date of the Agreement.
    Cause: A HUD-FHA monitoring review that cited violations of HUD-FHA 
single family program requirements that included: failure to conduct a 
face-to-face interview with prospective borrowers; use of inaccurate 
documentation to approve mortgagors; failure to resolve conflicting 
documentation; failure to secure required documentation for a HUD-FHA 
loan; closing loans that exceeded HUD-FHA maximum mortgage amounts; 
failure to reflect all charges to the buyers and sellers on the HUD--1 
Settlement Statement; failure to properly verify the source and/or 
adequacy of the funds to close and the mortgagor's credit history; 
failure to include recurring obligations when underwriting a loan; 
exceeding HUD-FHA guidelines without documenting significant 
compensating factors; and failure to document the commitment fees 
charged to mortgagors.
3. Keyrose Mortgage Company, Glendale, California
    Action: Proposed Settlement Agreement that includes a civil money 
penalty in the amount of $1,000, and corrective action to assure 
compliance with HUD-FHA requirements.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
program requirements that included: improper use of mortgage brokers to 
originate HUD-FHA insured mortgages; improper payments to mortgage 
brokers; failure to implement a Quality Control Plan for the 
origination of HUD-FHA insured mortgages; failure to meet the principal 
activity requirement of a HUD-FHA approved loan correspondent; failure 
to conduct face-to-face interviews with borrowers; and failure to 
maintain complete loan files.
4. Centennial Mortgage, Inc., South Bend, Indiana
    Action: Letter of Reprimand and proposed civil money penalty in the 
amount of $5,000.
    Cause: A false statement made to the Department in connection with 
an application for HUD-FHA mortgage insurance for a multifamily 
mortgage. The company certified that certain funds of the mortgagor 
entity were on deposit in a bank account prior to the time the account 
was established.
5. New England Funding Group, Inc., Marblehead, Massachusetts
    Action: Withdrawal of HUD-FHA mortgagee approval.
    Cause: Misrepresentation by the company that it was an approved 
Government National Mortgage Association (GNMA) seller/servicer.
6. Lambrecht Company, Southfield, Michigan
    Action: Withdrawal of HUD-FHA mortgagee approval.
    Cause: Failure to meet HUD-FHA mortgagee approval requirements due 
to cessation of operations.
7. Wells Federal Bank, Wells, Minnesota
    Action: Proposed Settlement Agreement that provides for 
reimbursement to the Department for the overpayment of a claim in 
connection with a Title I property improvement loan.
    Cause: Improper submission of an insurance claim to the Department 
in connection with a Title I property improvement loan.
8. Approved Mortgage Corporation, Homestead, 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 implement a Quality Control Plan for loan origination in accordance 
with HUD-FHA requirements.
9. Pacific Northwest Mortgage, Renton, Washington
    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).
10. Centerbank Mortgage Company, Waterbury, Connecticut
    Action: Settlement Agreement that includes payment to the 
Department in the amount of $5,000 and compliance with HUD-FHA loan 
servicing requirements.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
loan servicing requirements that included: failure to implement an 
adequate Quality Control Plan; failure to properly recertify Section 
235 mortgages; and failure to provide detailed explanations in notices 
sent to mortgagors advising them of rejection for the assignment 
program.
11. Canyon Springs Financial d/b/a American Builders Mortgage Santa 
Ana, 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 an acceptable Quality Control Plan, and failure to comply 
with HUD-FHA reporting requirements under the Home Mortgage Disclosure 
Act (HMDA).
12. Meridian Mortgage Financial Corporation, Aurora, Colorado
    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 an acceptable Quality Control Plan, and failure to comply 
with HUD-FHA reporting requirements under the Home Mortgage Disclosure 
Act (HMDA).

    Dated: August 4, 1994.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 94-19633 Filed 8-10-94; 8:45 am]
BILLING CODE 4210-27-P