[Federal Register Volume 60, Number 146 (Monday, July 31, 1995)]
[Notices]
[Pages 39002-39003]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18727]



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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner
[Docket No. FR-3911-N-02]


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) 708-1515. The 
Telecommunication 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, 1995 through June 30, 1995.

1. Community Lending Corporation, College Park, Maryland

    Action: Probation and proposed civil money penalty in the amount of 
$5,000.
    Cause: Failure by the company to remit to the Department mortgage 
insurance premiums collected from borrowers in connection with five 
HUD-FHA insured mortgage transactions; and failure to timely submit 
loans to HUD-FHA for mortgage insurance endorsement.

2. World Wide Credit Corporation, San Diego, California

    Action: Proposed Settlement Agreement of a civil money penalty in 
the amount of $1,500; indemnification for any claim losses in 
connection with 10 improperly originated Title I loans; and 
implementation of a Quality Control Plan.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
Title I program requirements that included: failure to document 
borrower's source of funds required for loan fees and closing costs; 
advising borrowers that loan fees may be deducted from loan proceeds; 
improperly advising borrowers to obtain gift letters; and omitting the 
loan disbursement date on the Note.
3. Greystone Servicing Corporation, Inc., New York, New York

    Action: Settlement Agreement that includes a payment to the 
Department in the amount of $228,000 and assurance by the company of 
compliance with the requirements of the Government National Mortgage 
Association (GNMA).
    Cause: Violation of GNMA requirements resulting from the improper 
termination of 57 GNMA mortgage-backed securities pools.

4. Whitehall Funding, Inc., Davenport, Iowa

    Action: Settlement Agreement that includes a payment to the 
Department in the amount of $75,000 and assurance by the company of 
compliance with the requirements of the Government National Mortgage 
Association (GNMA).
    Cause: Violation of GNMA requirements resulting from the improper 
termination of 13 GNMA mortgage-backed securities pools.

5. Washington Credit Union, Lynwood, Washington

    Action: Probation and proposed civil money penalty in the amount of 
$10,000.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
Title I property improvement loan program requirements that included: 
failure to comply with HUD-FHA reporting requirements under the Home 
Mortgage Disclosure Act (HMDA); failure to comply with dealer approval 
requirements; failure to report to HUD-FHA borrowers' uncompleted 
property improvements; failure to resolve a borrower complaint against 
a dealer; failure to verify a borrower's source of funds for the 
required initial payment; and inaccurate completion certificates.

6. Carl I Brown & Company, Kansas City, Missouri

    Action: Proposed Settlement Agreement that includes payment to the 
Department of $75,000; payment of a civil money penalty in the amount 
of $30,000; and corrective action by the company to assure compliance 
with HUD-FHA requirements.
    Cause: Review by HUD's contractor of the company's single family 
mortgage insurance claims submissions and loan servicing procedures 
that disclosed violations of HUD-FHA requirements. The violations 
included: overpayment by HUD of expenses paid; payment for preservation 
and protection work not performed; overpayment for tax refunds; 
improperly prepared claims submissions; inadequate quality control; 
improper dispositions of mortgagor escrow surpluses; and inadequate 
servicing of defaulted loans.

7. PNC Mortgage Corp. of America, Vernon Hills, Illinois

    Action: Proposed Settlement Agreement that includes payment to the 
Department in the amount of $84,375, and if determined to be 
appropriate, reimbursement for marketing losses resulting from untimely 
submitted insurance claims.
    Cause: Review by HUD's contractor of the company's single family 
mortgage insurance claims submissions citing violations of HUD-FHA 
requirements that included: untimely submission of insurance claims; 
and incorrect dates on claim forms.

8. Charter Mortgage Corporation, Fort Lauderdale, Florida

    Action: Probation
    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); failure to 
maintain an adequate Quality Control Plan; permitting improperly 
secured secondary financing to close HUD-FHA insured mortgages; failure 
to remit to HUD-FHA Up-Front Mortgage Insurance Premiums (UFMIPs) and 
late charges; submission of erroneous HUD-1 Settlement Statements; and 
failure to retain complete loan origination files. 

[[Page 39003]]


9. The Professional Investment & Financial Group, San Gabriel, 
California

    Action: Proposed Settlement Agreement that includes payment to the 
Department of a civil money penalty in the amount of $1,000; and 
revision of the advertising used by the company in its HUD-FHA Title I 
program activities.
    Cause: Use of misleading advertising by the company in connection 
with the Title I property improvement loan program.

10. Magna Financial Corporation, Irvine, California

    Action: Settlement Agreement that includes indemnification to the 
Department for any claim losses in connection with five improperly 
originated Title I loans; payment to the Department of 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 by the 
company of HUD-FHA Title I property improvement loan program 
requirements that included: failure to verify borrowers' source of 
funds required for initial payment; failure to properly verify 
borrower's income; requiring a minimum loan amount; failure to meet 
program requirements for the promissory note; failure to ensure that 
detailed descriptions of improvements were provided by borrowers; and 
failure to comply with HUD-FHA reporting requirements under the Home 
Mortgage Disclosure Act (HMDA).

11. Randall Mortgage, Inc., Maitland, Florida

    Action: Settlement Agreement that includes: indemnification to the 
Department in the amount of $87,657 for its claim loss in connection 
with an improperly originated HUD-FHA insured mortgage; indemnification 
for any future claim losses in connection with seven improperly 
originated mortgages; payment to the Department of a civil money 
penalty in the amount of $2,500; and corrective action to assure 
compliance with HUD-FHA requirements.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
requirements that included: failure to maintain an adequate Quality 
Control Plan for the origination of HUD-FHA insured mortgages; failure 
to verify borrowers' source of funds used for downpayment; failure to 
ensure that borrowers made the minimum required investment in the 
property; requiring a borrower to deposit excess escrow funds at 
closing; inadequate or lack of face-to-face interviews with borrowers; 
and failure to properly complete HUD Form 92900 Applications.

    Dated: July 20, 1995.
Jeanne K. Engel,
General Deputy Assistant Secretary for Housing--Federal Housing 
Commissioner.
[FR Doc. 95-18727 Filed 7-28-95; 8:45 am]
BILLING CODE 4210-27-P