[Federal Register Volume 65, Number 59 (Monday, March 27, 2000)]
[Notices]
[Pages 16216-16217]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7421]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4513-N-03]


Credit Watch Termination Initiative

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

ACTION: Notice.

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SUMMARY: This notice advises of the cause and effect of termination of 
Origination Approval Agreements taken by HUD's Federal Housing 
Administration against HUD-approved mortgagees through its Credit Watch 
Termination Initiative. This notice includes a list of mortgagees which 
have had their Origination Approval Agreements (Agreements) terminated.

FOR FURTHER INFORMATION CONTACT: The Quality Assurance Division, Office 
of Housing, Department of Housing and Urban Development, 451 Seventh 
St. SW, Room B133-P3214, Washington, DC 20410; telephone (202) 708-2830 
(This is not a toll free number). Persons with hearing or speech 
impairments may access that number via TTY by calling the Federal 
Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: HUD has the authority to address 
deficiencies in the performance of lenders' loans as provided in the 
HUD mortgagee approval regulations at 24 CFR 202.3. On May 17, 1999 (64 
FR 26769), HUD published a notice on its procedures for terminating 
origination approval agreements with FHA lenders and placement of FHA 
lenders on Credit Watch status (an evaluation period). In the May 17, 
1999 notice, HUD advised that it would publish in the Federal Register 
a list of mortgagees which have had their Origination Approval 
Agreements terminated.

Termination of Origination Approval Agreement

    Approval of a mortgagee by HUD/FHA to participate in FHA mortgage 
insurance programs includes an Agreement between HUD and the mortgagee. 
Under the Agreement, the mortgagee is authorized to originate single 
family mortgage loans and submit them to FHA for insurance endorsement. 
The Agreement may be terminated on the basis of poor performance of 
FHA-insured mortgage loans originated by the mortgagee. The Termination 
of a mortgagee's Agreement is separate and apart from any action taken 
by HUD's Mortgagee Review Board under HUD's regulations at 24 CFR part 
25.

Cause

    HUD's regulations permit HUD to terminate the Agreement with any 
mortgagee having a default and claim rate for loans endorsed within the 
preceding 24 months that exceeds 200 percent of the default and claim 
rate within the geographic area served by a HUD field office, and also 
exceeds the national default and claim rate. For the second review 
period, HUD is only terminating the Agreement of mortgagees whose 
default and claim rate exceeds both the national rate and 300 percent 
of the field office rate.

Effect

    Termination of the Agreement precludes that branch(s) of the 
mortgagee from originating FHA-insured single family mortgages within 
the area of the HUD field office(s) listed in this notice. Mortgagees 
authorized to purchase, hold, or service FHA insured mortgages may 
continue to do so.
    Loans that closed or were approved before the Termination became 
effective may be submitted for insurance endorsement. Approved loans 
are (1) those already underwritten and approved by a Direct Endorsement 
(DE) underwriter employed by an unconditionally approved DE lender and 
(2) cases covered by a firm commitment issued by HUD. Cases at earlier 
stages of processing cannot be submitted for insurance by the 
terminated branch; however, they may be transferred for completion of 
processing and underwriting to another mortgagee or branch authorized 
to originate FHA insured mortgages in that area. Mortgagees are 
obligated to continue to pay existing insurance premiums and meet all 
other obligations associated with insured mortgages.

[[Page 16217]]

    A terminated mortgagee may request to have its authority to 
originate FHA loans reinstated no earlier that six months after the 
effective date of the Termination. The request, addressed to the 
Director, Office of Lender Activities and Program Compliance, should 
describe any actions taken (e.g., changes in operations and/or 
personnel) to eliminate the cause(s) of the poor loan performance that 
led to the Termination.

Action

    The following mortgagees have had their Agreements terminated by 
HUD:

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                                     Mortgagee branch         HUD office        Termination     Home ownership
         Mortgagee name                  address             jurisdictions    effective date        centers
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Atlantic Vanguard Mortgage dba   251 Maitland Ave.,       Orlando, FL.......      01/17/2000  Atlanta.
 First Advantage Mortgage.        Suite 304 Altamonte
                                  Springs, FL 32701.
CTX Mortgage Company...........  151 Kalmus STE J-4       Los Angeles, CA...      11/01/1999  Santa Ana.
                                  Costa Mesa, CA 92626.
Embassy Mortgage Corp..........  6817 W 167th St. Tinley  Chicago, IL.......      01/21/2000  Atlanta.
                                  Park, IL 60477.
Paradigm Mortgage Associates     7845 Baymeadows Way      Coral Gables, FL..      11/01/1999  Atlanta.
 Inc.                             Jacksonville, FL 32256.
RE Mortgage Group dba American   8141 E Kaiser Blvd,      Santa Ana, CA.....      01/21/2000  Santa Ana.
 Pacific Mortgage Corp.           Suite 212 Anaheim
                                  Hills, CA 92808.
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    Dated: March 21, 2000.
William C. Apgar,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 00-7421 Filed 3-24-00; 8:45 am]
BILLING CODE 4210-27-P