[Federal Register Volume 61, Number 159 (Thursday, August 15, 1996)]
[Notices]
[Pages 42436-42439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20793]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner
[Docket No. FR-4051-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 Program Compliance, 451 Seventh Street, S.W., 
Washington, D.C. 20410, telephone (202) 708-1515. (This is not a toll-
free numbers.) A telecommunications device for hearing- and speech-
impaired individuals (TTY) is available at 1-800-877-8339 (Federal 
Information Relay Service).

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, 1996 through June 30, 1996.

1. Southland Financial, Inc.; Fullerton, California

    Action: Withdrawal of HUD-FHA mortgagee approval and proposed civil 
money penalty in the amount of $50,000.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
requirements including: failure to timely remit to HUD-FHA Up-Front 
Mortgage Insurance Premiums (UFMIPs) and to remit late charges and 
interest penalties; failure to timely submit loans for mortgage 
insurance endorsement; and failure to maintain an adequate Quality 
Control Plan.

2. Stevens Financial Corporation; Brea, California

    Action: Withdrawal of HUD-FHA mortgagee approval and proposed civil 
money penalty of $50,000.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
requirements including: failure to timely remit Up-Front Mortgage 
Insurance Premiums (UFMIPs) to HUD-FHA and to remit late charges and 
interest penalties; improperly using current UFMIP funds to pay the 
UFMIPs for older loans where the UFMIP has not been remitted to HUD-
FHA; commingling borrowers' UFMIPs with company operating funds; 
failure to timely submit loans to HUD-FHA for mortgage insurance 
endorsement; submitting alleged false information to HUD-FHA to obtain 
branch office approvals; paying compensation to lenders not approved by 
HUD-FHA, and to HUD-FHA approved loan correspondents not sponsored by 
the company for the origination of HUD-FHA insured mortgages; and 
failure to implement and maintain an adequate Quality Control Plan.

[[Page 42437]]

3. Renet Financial Corporation; Orange, California

    Action: Withdrawal of HUD-FHA mortgagee approval and proposed civil 
money penalty in the amount of $50,000.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
requirements that included: failure to timely remit Up-Front Mortgage 
Insurance Premiums (UFMIPs) to HUD-FHA and to remit late charges and 
interest penalties; improperly using current UFMIP funds to pay the 
UFMIPs for older loans where the UFMIP has not been remitted to HUD-
FHA; failure to timely submit loans to HUD-FHA for mortgage insurance 
endorsement; using borrowers' escrow funds to close HUD-FHA loans; 
failure to implement and maintain an adequate Quality Control Plan for 
the origination of HUD-FHA insured mortgages; failure to comply with 
HUD-FHA reporting requirements under the Home Mortgage Disclosure Act 
(HMDA); failure to report to HUD-FHA a loss of more than 20 percent of 
net worth; and failure to document borrowers' source of funds to close 
HUD-FHA insured mortgages.

4. B&M Mortgage Corporation; College Park, Georgia

    Action: Proposed withdrawal of HUD-FHA mortgagee approval.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
requirements that included: failure to document borrowers' source of 
funds used for downpayment and/or closing costs; failure to document 
discrepancies in a HUD-FHA insured loan transaction; charging 
unallowable fees to borrowers; failure to maintain required loan 
documents; failure to implement and maintain an adequate Quality 
Control Plan; and failure to respond to a findings letter issued by the 
Quality Assurance Division.

5. Alliance Mortgage Corporation; Villa Park, Illinois

    Action: Settlement Agreement that includes indemnification to the 
Department for any claim losses in connection with six improperly 
originated loans; and corrective action to assure compliance with HUD-
FHA requirements.
    Cause: A HUD Office of Inspector General audit report that 
disclosed violations of HUD-FHA requirements including: failure to 
conduct face-to-face interviews with mortgagors; failure to properly 
verify borrowers' gift funds; failure to properly verify a borrower's 
income; understating a borrower's liabilities; and failure to maintain 
an adequate Quality Control Plan.

6. Statewide Mortgage Company; Birmingham, Alabama

    Action: Settlement Agreement that includes: indemnification to the 
Department for any claim losses in connection with 31 improperly 
originated HUD-FHA insured Title I property improvement loans; 
corrective action to assure compliance with HUD-FHA requirements; and a 
future review by an independent CPA to determining compliance by the 
company's Bellevue, Washington branch office with HUD-FHA Title I 
program requirements.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
Title I program requirements including: failure to conduct face-to-face 
or telephone interviews with borrowers; approving loan applicants based 
upon alleged false leases; failure to present Title I loan proceeds 
directly to borrowers; alleged falsified property inspection reports; 
failure to establish required equity; and reporting loans for HUD-FHA 
insurance that contained inaccurate information.

7. Home Bank F.S.B.; Cleveland, Ohio

    Action: Settlement Agreement that provides for reimbursement to the 
Department for losses incurred with respect to 21 improperly originated 
HUD-FHA insured mortgages during 1990 and 1991.
    Cause: Violations of HUD-FHA requirements by a former employee that 
included failure to perform face-to-face interviews with borrowers; and 
submission of false information to the Department.

8. Amerifirst Mortgage Corporation; Hempstead, New York

    Action: Settlement Agreement that includes indemnification to the 
Department for any claim losses in connection with 13 improperly 
originated HUD-FHA insured mortgages; and payment to the Department in 
the amount of $52,000.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
requirements including: failure to implement an adequate Quality 
Control Plan; failure to adequately document a borrower's source of 
funds; overinsured mortgages; exceeding appropriate loan-to-value 
ratios on a cash out refinance; permitting unallowable credits to the 
mortgagor at closing; failure to conform to the maximum construction 
rehabilitation period; approving borrowers with poor credit; improper 
transfer of GNMA escrow funds; failure to properly calculate the 
mortgagor's effective income; and closing loans with duplication of 
charges.

9. Sun West Mortgage Company; Cerritos, California

    Action: Settlement Agreement that includes: indemnification to the 
Department for any claim loss in connection with an improperly 
originated HUD-FHA insured mortgage; payment to the Department of a 
civil money penalty in the amount of $6,500; and corrective action to 
assure compliance with HUD-FHA requirements.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
requirements including: use of alleged false information to originate a 
HUD-FHA insured mortgage; misrepresenting the Title I property 
improvement and single family insurance programs; and using false and 
misleading advertising in the company's HUD-FHA Title I program 
activities.

10. Provident Mortgage Corporation; Visalia, California

    Action: Settlement Agreement that includes indemnification to the 
Department for its claim loss in connection with one improperly 
originated HUD-FHA insured mortgage; and corrective action to assure 
compliance with HUD-FHA requirements.
    Cause: A HUD monitoring review that cited the company for failure 
to determine a borrower's source of funds used for downpayment; and 
failure to cooperate with a monitoring review of the company's HUD-FHA 
insured mortgage activities.

11. Camelview Financial Services; Scottsdale, Arizona

    Action: Settlement Agreement that includes; payment of a civil 
money penalty to the Department in the amount of $2,000; and corrective 
action to assure compliance with HUD-FHA requirements.
    Cause: Use of false and misleading advertising in connection with 
the HUD-FHA Title I program.

12. Occidental Mortgage Corporation; Covina, California

    Action: Settlement Agreement that includes: payment of a civil 
money penalty to the Department in the amount of $2,000; and corrective 
action to assure compliance with HUD-FHA Title I program requirements.
    Cause: Use of false and misleading advertising in connection with 
the HUD-FHA Title I program.

13. Suncoast Lenders, Inc.; Upland, California

    Action: Settlement Agreement that includes: payment of a civil 
money

[[Page 42438]]

penalty to the Department in the amount of $2,000; and corrective 
action to assure compliance with HUD-FHA requirements.
    Cause: Use of false and misleading advertising in connection with 
the HUD-FHA Title I program.

14. Nova Funding Group; Encino, California

    Action: Settlement Agreement that includes: payment to the 
Department of a civil money penalty in the amount of $2,000; and 
corrective action to assure compliance with HUD-FHA requirements.
    Cause: Use of false and misleading advertising in connection with 
the HUD-FHA Title I program.

15. San Diego Funding d/b/a SD Funding; San Diego, California

    Action: Settlement Agreement that includes: payment of a civil 
money penalty to the Department in the amount of $2,000; and corrective 
action to assure compliance with HUD-FHA requirements.
    Cause: Use of false and misleading advertising in connection with 
the HUD-FHA Title I program.

16. United Mortgagee, Inc.; Virginia Beach, Virginia

    Action: Settlement Agreement that includes: payment to the 
Department in the amount of $2,000; and corrective action to assure 
compliance with HUD-FHA requirements.
    Cause: Use of false and misleading advertising in connection with 
the HUD-FHA Title I program.

17. Padre Financial Services Corporation; San Diego, California

    Action: Proposed Settlement Agreement that includes: payment to the 
Department of a civil money penalty in the amount of $2,000; and 
corrective action to assure compliance with HUD-FHA requirements.
    Cause: Use of false and misleading advertising in connection with 
the HUD-FHA Title I program.

18. Real Estate Plus Mortgage; Redondo Beach, California

    Action: Proposed Settlement Agreement that includes: payment to the 
Department of a civil money penalty in the amount of $2,000; and 
corrective action to assure compliance with HUD-FHA requirements.
    Cause: Use of false and misleading advertising in connection with 
the HUD-FHA Title I program.

19. California Federal Bank; Los Angeles, California

    Action: Letter of Reprimand
    Cause: Use of false and misleading advertising in connection with 
the HUD-FHA Title I program.

20. Mortgage Lenders Acceptance Corporation; Laguna Hills, California

    Action: Letter of Reprimand
    Cause: Use of false and misleading advertising in connection with 
the HUD-FHA Title I program.

21. Mortgagees and Title I Lenders That Failed To Comply With HUD-FHA 
Requirements for the Submission of an Annual Audited Financial 
Statement and/or Payment of the Annual Recertification Fee

    Action: Withdrawal of HUD-FHA mortgagee approval and Title I lender 
approval.
    Cause: Failure to submit to the Department the required annual 
audited financial statement and/or remit the required annual 
recertification fee.
    Mortgagees Withdrawn: Citizens Industrial Bank, Mobile, AL; First 
Coastal Funding, Inc., Mobile, AL; Prudential Mortgage Service Co., 
Santa Ana, CA; Mother Lode Mortgage, Inc., Auburn, CA; California 
Mortgage Group, Inc., Garden Grove, CA; Mortgage Line, Inc., Walnut 
Creek, CA; Villa Mortgage Corp., Diamond Bar, CA; Bramalea Mortgage, 
Inc., Newport Beach, CA; SC Funding Corp., Irvine, CA; GM Funding 
Services, Inc., Inglewood, CA; Brookside Financial, Inc., Redlands, CA; 
First United Federal Mtg. Inc, Phelan, CA; McCollum Funding, Redding, 
CA; All Homeowners Mortgage Corp., Lake Forest, CA; FIC Corporation, 
Stanton, CA; Apco Financial Corp., Carlsbad, CA; Vintage Brokers, Inc., 
Fremont, CA; Almerica Funding, Sacramento, CA; New Freedom Financial 
Enterprise, Simi Valley, CA; Del Mar Funding, San Diego, CA; Executive 
Financial Invest, Inc., Fremont, CA; Cable Mortgage, Inc., Vacaville, 
CA; American Mortgage Network, Inc., Richmond, CA; Santa Clara 
Financial Corp., San Jose, CA; Williams Mortgage Group, Inc., Garden 
Grove, CA; California Patriot, Inc., Orangevale, CA; FCB Enterprises, 
Inc., Northridge, CA; Earl T. Combs, Inc., Turlock, CA; Blue Star 
Mortgage, Inc., Riverside, CA; Bryce Funding Group, Inc., Rancho 
Cucamonga, CA; EFC Mortgage Corp., Newport Beach, CA; Cook and Cook 
Mortgage, Inc., Cameron Park, CA; C and M McGee, Inc., Rancho Cordova, 
CA; United Mortgage and Investment, Boulder, CO; Denver Mortgage 
Funding, Denver, CO; MacWest Mortgage Corporation, Denver, CO; 
Residential Mortgage Association, Inc., Miami, FL; Independent Mortgage 
Servicing Corp., Winter Park, FL; Gwinnett Federal Bank FSB, 
Lawrenceville, GA; Kipling Mortgage Group, Inc., Atlanta, GA; Great 
American Lending Group, Inc., Atlanta, GA; American Independent 
Mortgage, Atlanta, GA; Biggs Penn Mortgage, Atlanta, GA; Pacific First 
Mortgage, Inc., Aiea, HI, T-Tyme, Inc., Boise, ID; Deerfield Federal 
Savings; Deerfield, IL; Five Star Financial Services, Schaumburg, IL; A 
Mortgage Company, Frederick, MD; Builder Financial Services of 
Baltimore, LLC, Columbia, MD; Atlantic Mortgage Corporation, East 
Detroit, MI; Farmington Mortgage Company, Farmington Hill, MI; Home 
Financial Center Mortgage Corp., Bloomington, MN; ABI Mortgage Corp., 
Saint Paul, MN; Clayton Mortgage Assoc, Inc., Clayton, MO; American 
Financial Group, Inc., Charlotte, NC; First Realty Fin Ser of NJ, North 
Brunswick, NJ; American National Funding Corp., Las Vegas, NV; Four 
Star Financial Ser-Nevada, Las Vegas, NV; James Financial Services 
Corp., Las Vegas, NV; Construction Management Group, Harrison, NY; 
Washington Financial Corp., University Heights, OH; Brumbaugh and 
Fulton Company, Tulsa, OK; Central Savings Bank PA SA, Lititz, PA; 
Miltex Mortgage, Inc., Austin, TX; Cowest Mortgage Corporation, Dallas, 
TX; First Home Mortgage, Inc., Houston, TX; American Bankers Mortgage 
Corp., Denton, TX; Tejas Mortgage Investors, Inc., Wichita Falls, TX; 
Texas Financial Mortgage Corp., Houston, TX; American Financial 
Mortgage, Dallas, TX; American Eagle Mortgage, Provo, UT; Atherton 
Mortgage-Utah, Inc., Salt Lake City, UT; Fairland Mortgage Co. Inc., 
Annandale, VA; Union Financial Corp., McLean, VA; First Dominion 
Mortgage Corp., Annandale, VA; America's Lending Network, Inc., 
Fairfax, VA; Jameson Group, Inc., Woodinville, WA; National Home Loan 
Mortgage, Inc., Kirkland, WA; Forest Park Mortgage Co., Seattle, WA; 
Windsor Mortgage, Seattle, WA; Village Oaks Financial Group, Bullhead 
City, AZ; First Preferred Federal Financial Serv, Downey, CA; Sierra 
Cal Investments, Sacramento, CA; Rio Vista Mortgage Corporation, San 
Diego, CA; Nationwide Realty Services, Inc., San Diego, CA; Diablo 
Valley Properties, Inc., Walnut Creek, CA; Pacific West Bancorp Mtg. 
Corp., Burbank, CA; Trans Capital Mortgage, Inc., Los Angeles, CA; 
Coast Capital, Torrance, CA; World Wide Mortgage, San Diego, CA; DJS, 
Inc., Westlake Village, CA; RL Mortgage, Inc., Los Angeles, CA; Prime 
Financial Mortgage, Ventura, CA; RKL Mortgage Service, Inc., Costa 
Mesa, CA; Equity One Lenders Service, Inc., Placentia, CA; Nations One 
Mortgage Corp.,

[[Page 42439]]

Englewood, CO; East Coast Mtg and Invest Co., Miami, FL; Mortgage 
Bankers Group, Inc., Miami, FL; Interlink Financial Corp., Orlando, FL; 
American Mortgage Express, Inc., Miami, FL; Shorewood Financial, Inc., 
Fort Lauderdale, FL; Fidelity Loan Services, Inc., Arlington Heights, 
IL; Americas Mortgage Servicing, Inc., Frederick, MD; Developers 
Service Corporation, Troy, MI; Alliance Lending Group, Inc., Charlotte, 
NC; Foremost Mortgage Brokerage, Inc., Shrewsbury, NJ; Apple National 
Mortgage, Springfield, NJ; MCS Mortgage Company, Reno, NV; T and E 
Mortgage Company, San Antonio, TX; Primesource Mortgage, El Paso, TX; 
Spectrum Financial Corp., Silverdale, WA; Mortgage Express 
Incorporated, Green Bay, WI; First Savings Bank Alabama FA, Hamilton, 
AL; Rancho Vista National Bank, Vista, CA; Irvinecity Bank FSB, Irvine, 
CA; United California Savings Bank, Santa Ana, CA; International 
Savings Bank, San Diego, CA; Modern Federal Savings Loan Assn, Grand 
Junction, CO; Shelton Savings Bank, Shelton, CT; Lincoln Savings and 
Loan Assn, Miami, FL; Amtrust Bank, Boca Raton, FL; First Federal 
Savings Bank, Brunswick, GA; South Georgia FSB, Glennville, GA; 
Development Bank, American Samoa, HI; King City Federal Savings Bank, 
Mount Vernon, IL; Central Federal Savings ALA, Cicero, IL; Loomis 
Federal Savings and Loan, Chicago, IL; First Federal Savings Bank FSB, 
Rockford, IL; First of Kansas Banking Savings, Hays, KS; Franklin 
Savings Association, Ottawa, KS; Peoples Bank and Trust Co, Owenton, 
KY; Kentucky Enterprise Bank FSB, Newport, KY; First Federal Bank for 
Savings N KY, Covington, KY; Farmers National Bank and Trust Co, 
Williamsburg, KY; Paul Revere Life Insurance Company, Worcester, MA; 
Standard Federal Savings Association, Frederick, MD; Reisterstown 
Federal Sav Bk, Reisterstown, MD; Old Court Savings and Loan, Inc., 
Baltimore, MD; Charter Financial Corporation, Livonia, MI; AAA Mortgage 
Corporation, Bingham Farms, MI; First Security Bank, Byron, MN; 
Guaranty Federal Savings Bank, Springfield, MO; Cleveland Federal Bank, 
Shelby, NC; Omnibank FSB, Salisbury, NC; Home Federal Savings Bank, 
Kings Mountain, NC; Southtrust Bank Central Carolina, Concord, NC; CFX 
Bank, Keene, NH; New Dartmouth Bank, Hooksett, NH; Crestmont Federal 
Savings ALA, Edison, NJ; Bay Ridge Federal Savings Bank, Brooklyn, NY; 
United Northern FSB, Watertown, NY; Mid-Hudson Savings Bank FSB, 
Fishkill, NY; Hamilton Federal Savings ALA, Brooklyn, NY; Stillwater 
Savings and Loan Assn, Stillwater, OK; Sharon Savings Bank, Darby, PA; 
Home Federal Savings Bank SC, Rock Hill, SC; Peoples Federal Savings 
and Loan Assoc, Conway, SC; National First Lenders Corp., Knoxville, 
TN; Federal Savings Bank FA, Dumas, TX; Village Savings Assn, Houston, 
TX; Southwestern Savings and Loan Assn, El Paso, TX; Jefferson Savings 
and Loan, Warrenton, VA; Tidemark Bank for Savings FSB, Newport News, 
VA; University Savings Bank, Seattle, WA; Summit Savings Assn, 
Bellevue, WA; First National Bank, Baldwin, WI.
    Title I Lenders Withdrawn: CFC Mortgage Corporation, Lancaster, CA; 
Warner Oaks Financial Corp., Woodland Hills, CA; Renet Financial 
Corporation, Anaheim, CA; American Fidelity Mortgage, San Diego, CA; 
FIC Corporation, Stanton, CA; Heartland Mortgage Corporation, Atlanta, 
GA; Loans, Inc., Honolulu, HI; Antilles Finance Corp., Carolina, PR; 
Rio Vista Mortgage Corp., San Diego, CA; Del Mar Funding, Inc., San 
Diego, CA; Southland Mortgage Lending Corp., Marietta, GA; Plaza 
Mortgage, Inc., Medford, OR; Union Financial Corporation, McLean, VA; 
Illinois Guarantee Savings Bk, Effingham, IL; Bankers Thrift and Loan 
Assn, Leawood, KS.

    Dated: August 6, 1996.
Stephanie A. Smith,
General Deputy Assistant Secretary for Housing-Federal Housing 
Commissioner.
[FR Doc. 96-20793 Filed 8-14-96; 8:45 am]
BILLING CODE 4210-27-P