[Federal Register Volume 65, Number 172 (Tuesday, September 5, 2000)]
[Notices]
[Pages 53730-53737]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-22600]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4558-N-03]


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: D. Jackson Kinkaid, Secretary to the 
Mortgagee Review Board, 451 7th Street, SW, Washington, DC 20410, 
telephone: (202) 708-3041 extension 3574 (this is not a toll-free 
number). 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, Public Law 101-235, approved December 
15, 1989), requires that HUD ``publish 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, 1998 through May 31, 2000.

1. AccuBanc Mortgage/Medallion Mortgage Company, Dallas, TX

    Action: Proposed settlement agreement that would include the 
indemnification on loans in which violations of the HUD/FHA 
requirements and regulations occurred.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations. AccuBanc 
also reported to the Department a number of similar loans containing 
violations of HUD/FHA requirements.

2. Adana Mortgage Bankers, Inc., Atlanta, GA

    Action: Proposed settlement agreement that would include the 
indemnification on up to six loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $1,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

3. Alliance Mortgage Banking, Massapequa, NY

    Action: Proposed settlement agreement that would include the 
indemnification on up to twenty-six loans in which violations of the 
HUD/FHA requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $25,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

4. Allstate Mortgage Company, Norwalk, CA

    Action: Immediately and permanently withdrew the HUD/FHA approval.
    Cause: Serious violations of HUD/FHA requirements and regulations 
that included the indictment and conviction of the president and other 
officers for mail fraud and money laundering.

5. Alpha America Financial, Inc., Costa Mesa, CA

    Action: Proposed settlement agreement that would include the 
payment to the Department of a civil money penalty of $5,000.
    Cause: An advertisement in a mortgage industry publication that 
invited other mortgagees to become affiliated with Alpha as net 
branches.

6. Ambassador Mortgage Corporation, Turnersville, NJ

    Action: Proposed settlement agreement that would include the 
payment to the Department of a civil money penalty of $25,000; payment 
to the Department the amount of the over-insurance in two loans; and 
refund to mortgagors all unallowable fees.

[[Page 53731]]

    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

7. Ameribanc Mortgage Corp., Mesa, AZ

    Action: Proposed settlement agreement that would include the 
indemnification on fifteen loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $55,500.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

8. Amerifirst Mortgage Corporation, Hempstead, NY

    Action: Proposed withdrawal of the HUD/FHA approval for a period of 
three years; and proposed payment to the Department of a civil money 
penalty of $100,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: 
submitting to HUD/FHA false/inaccurate HUD-1 Settlement Statements; 
failing to ensure that non-profit mortgagors met their required 
investment; failing to ensure that a mortgagor met the minimum required 
investment; submitting a delinquent loan for endorsement; using false 
income to qualify a mortgagor; originating 203k mortgages on ineligible 
properties; originating a loan using an incorrect Social Security 
Number; approving a mortgagor with a delinquent student loan; approving 
a refinance transaction for a mortgagor with delinquent credit; failing 
to accurately calculate the mortgagor's effective income; failing to 
verify a mortgagor's source of funds for closing; and using a false 
gift letter to document a mortgagor's source of funds.

9. Apollo Mortgage and Financial Services, Inc., St. Petersburg, FL

    Action: Debarred Apollo Mortgage and Financial Services, Inc. for 
one year; the proposed payment to the Department of a civil money 
penalty of $40,000; and the recommending of debarment of principals for 
one year.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

10. ARC Financial Group, Inc., Marlton, NJ

    Action: Proposed settlement agreement that would include the 
indemnification of up to seven loans in which violations of the HUD/FHA 
requirements and regulations occurred; refund all unallowable fees 
charged to borrowers on five loans originated during the last two 
years; perform monthly Quality Assurance reviews; and the payment to 
the Department of a civil money penalty of $30,500.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplements the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

11. Associates Mortgage Group, Inc., Louisville, KY

    Action: Proposed settlement agreement that would include the 
indemnification of a loan in which violations of the HUD/FHA 
requirements and regulations occurred.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

12. Assurety Mortgage Group, Inc., Decatur, GA

    Action: Withdrew the HUD/FHA approval for a period of three years; 
and the payment to the Department of a civil money penalty of $45,500.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: 
failed to report a violation of law or regulation, false statement or 
program abuse to the HUD field office or the Inspector General; used 
altered documents for loan approval; failed to document source of funds 
and misrepresented Title II program requirements to borrowers; allowed 
the borrower to hand carry the VOE and VOD; failed to document income 
used for loan approval; failed to document contributory value of labor; 
allowed debts to be omitted from the calculation of the debt to income 
ratios; approved loans that exceeded acceptable ratios without 
compensating factors; charged borrowers unallowable fees; failure to 
maintain complete origination files; failed to obtain acceptable 
documentation to verify income; failed to obtain the borrower's 
signature; failed to verify a Social Security Number (SSN); failed to 
maintain and implement a Quality Control Plan in compliance with HUD/
FHA requirements and perform Quality Control reviews; and approved a 
loan without checking the Credit Alert Interactive Voice Response 
System (CAIVRS).

13. Bank of New York, New York, NY

    Action: Considered the matter and took no action at this time.
    Cause: Information received by HUD.

14. California Empire Financial Group, Inc., Rancho Cucamonga, CA

    Action: Proposed settlement agreement that would include the 
indemnification on eight loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $22,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

15. Charter Mortgage Corporation, Ft. Lauderdale, FL

    Action: Permanently withdrew the HUD/FHA approval.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: 
failing to remit Up Front Mortgage Insurance Premiums (UFMIPs) to HUD/
FHA within 15 days of loan closing and to remit late charges and 
interest payments; failingre to submit loans for endorsement in a 
timely manner; failing to implement and maintain an adequate Quality 
Control Plan for the origination of HUD/FHA-insured mortgages; and 
using false and misleading advertising.

16. CHM Mortgage, LLC, El Segundo, CA

    Action: Prior to being considered by the Board, CHM voluntarily 
withdrew its HUD/FHA approval. The Board voted to extend CHM's period 
of withdrawal to a period of three years; and the payment to the 
Department of a civil money penalty of $8,500.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: 
Failure to review the governmentwide list of debarred, suspended and 
excluded parties and HUD's limited denial of participation list; 
failure to implement and maintain an adequate Quality Control Plan for 
the origination of HUD/FHA-insured mortgages; and failure to comply 
with HUD/FHA's annual loan origination reporting requirements which 
supplements the requirements of the Home Mortgage Disclosure Act.

17. Community Family Mortgage, Inc., Atlanta, GA

    Action: Proposed settlement agreement that would include the 
payment to the Department of a civil money penalty of $6,500; submit to 
the

[[Page 53732]]

Department all Home Mortgage Disclosure Act data since 1993; and for 
the previous two calendar years, audit its HUD/FHA activity and refund 
all unallowable fees charged mortgagors.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplements the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

18. Community Home Mortgage Corporation, Melville, NY

    Action: Proposed settlement agreement that would include the 
indemnification on up to eighteen loans in which violations of the HUD/
FHA requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $120,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplements the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

19. Countrywide Home Loans, Inc., Calbasas, CA

    Action: Proposed settlement agreement that would include the 
indemnification on up to five loans in which violations of the HUD/FHA 
requirements and regulations occurred; enhance its Quality Control 
Plan; and the payment to the Department of $30,000.
    Cause: A review by HUD's Quality Assurance Division's contractor 
discovered failures to comply with HUD/FHA Loss Mitigation requirements 
and other serious violations of HUD/FHA's servicing requirements and 
regulations.

20. County Mortgage Company, Inc., West Caldwell, NJ

    Action: Proposed settlement agreement that would include the 
indemnification on up to eleven loans in which violations of the HUD/
FHA requirements and regulations occurred; the requirement of County 
Mortgage Company, Inc. to enhance its Quality Control Program; the 
payment to the Department of a civil money penalty of $25,000; and the 
requirement that its underwriters obtain additional training in 
underwriting HUD/FHA-insured mortgages.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

21. DiverseAmerican Mortgage Company, East Greenwich, RI

    Action: Permanently withdrew the HUD/FHA approval; and the payment 
to the Department of a civil money penalty of $250,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: 
failing to remit Up-Front Mortgage Insurance Premiums (UFMIP) to HUD/
FHA; and failing to remit UFMIP to HUD/FHA in a timely manner.

22. Eagle Home Loans and Realty, Inc., Sacramento, CA

    Action: Proposed settlement agreement that would include the 
indemnification on two loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $1,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplements the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

23. Empire Funding Corporation, Austin, TX

    Action: Proposed the withdrawal of HUD/FHA approval for a three 
year period; and the payment to the Department of a civil money penalty 
of $60,500. This action occurred as the result of the Department's 
inability to finalize a settlement agreement with Empire proposed at 
the February 18, 1999 Mortgagee Review Board meeting.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: 
failure to re-approve two dealers in a timely manner and funding ten 
Title I loans from non-approved dealers; and failure to ensure that 
detailed descriptions of the proposed improvements for five loans were 
provided by the borrowers.

24. Executive Funding Services, Camp Springs, MD

    Action: Proposed a settlement agreement that would include 
requiring Executive Funding Services to buydown two overinsured loans; 
the indemnification on eight loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $10,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplements the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

25. Express National Mortgage, Norwalk, CA

    Action: Proposed settlement agreement that would include the 
indemnification on up to six loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $16,500.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplements the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

26. Federal Home Mortgage Corporation, Columbus, OH

    Action: Proposed settlement agreement that would include Federal 
Home Mortgage Corporation agreeing to change its name to comply with 
the provisions of Title 18 United States Code Section 709 and the 
payment to the Department of a civil money penalty of $5,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplements the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

27. Fidelity Home Mortgage Corporation, Timonium, MD

    Action: Proposed settlement agreement that would include the 
indemnification on up to eight loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $27,500.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplements the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

28. Financial Mortgage Corporation, Ft. Washington, PA

    Action: Proposed settlement agreement that would include the 
indemnification on one loan in which violations of the HUD/FHA 
requirements and regulations occurred;

[[Page 53733]]

and the payment to the Department of a civil money penalty of $1,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

29. Financial Research Services, Inc., Miami, FL

    Action: Withdrew the HUD/FHA approval for a period of ten years and 
the payment to the Department of a civil money penalty of $75,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: 
failure to remit loan pay-off funds to holders of GNMA mortgage-backed 
securities; submission of false certifications and documentation to 
secure late endorsement on defaulted loans; failure to properly account 
for and disburse 203(k) escrow funds; failure to conduct quality 
control reviews; failure to properly originate 203(h) loans; failure to 
properly calculate effective income; failure to verify the source of 
the mortgagors' funds to close; failure to initiate early contact with 
delinquent borrowers; failure to use realistic repayment plans for 
defaulted mortgages; failure to conduct an acceptable Management Review 
prior to approving foreclosure; misuse of borrower escrow funds; and 
failure to retain records.

30. First Mortgage of Indiana, Indianapolis, IN

    Action: Proposed a settlement agreement that would include the 
indemnification on up to six loans in which violations of the HUD/FHA 
requirements and regulations occurred; perform an audit, by an 
independent CPA, of all HUD/FHA-insured mortgages originated by First 
Mortgage of Indiana during the last two years; refund all unallowable 
fees charged mortgagors; and the payment to the Department of a civil 
money penalty of $5,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplements the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

31. First United Mortgage Company, Kenilworth, NJ

    Action: Proposed settlement agreement that would include the 
indemnification on up to three loans in which violations of the HUD/FHA 
requirements and regulations occurred; audit the past four years of 
origination activity; refund all improperly collected fees; submit to 
the Department a proper Quality Control Plan; and the payment to the 
Department of a civil money penalty of $50,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplements the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

32. GAMA Mortgage Corporation, New Orleans, LA

    Action: Proposed settlement agreement that would include the 
payment to the Department of a civil money penalty of $1,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplements the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

33. Gateway Funding Diversified Mortgage Services, Conshohocken, PA

    Action: Proposed settlement agreement that would include the review 
and refund of all improper commitment fees charged mortgagors over the 
last two years; buydown the mortgage amounts in two loans; submit its 
quality control results to the Department quarterly over the next 
twelve months; and the payment to the Department of a civil money 
penalty of $25,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

34. The GM Group Inc., Richardson, TX

    Action: Withdrew the HUD/FHA approval for a period of three years; 
payment to the Department of a civil money penalty of $700,000; and 
recommended that principals be considered for debarment.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: 
failing to submit Upfront Mortgage Insurance Premiums (MIP) to HUD in a 
timely manner; using MIP and escrow funds for operating cash needs; 
submitting loans for endorsement that did not comply with the late 
endorsement requirements; and submitting a loan to HUD where the two-
year work history was not properly supported and with apparent 
falsified documentation.

35. Golden Empire Mortgage, Inc., Bakersfield, CA

    Action: Proposed settlement agreement that would include the 
indemnification on up to thirty-one loans in which violations of the 
HUD/FHA requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $30,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

36. Greystone Servicing Corporation, New York, NY

    Action: Considered the matter and decided to take no further 
action.
    Cause: A review by HUD's Quality Assurance Division and Office of 
Inspector General.

37. Heartland Mortgage, Inc., Tucson, AZ

    Action: Proposed settlement agreement that would include the 
indemnification on one loan in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $5,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplements the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

38. Hollywood Mortgage, Inc., Palmdale, CA

    Action: Proposed withdrawal of the HUD/FHA approval for a period of 
three years; and the proposed payment to the Department of a civil 
money penalty of $28,600. This action resulted from the Department's 
inability to finalize a settlement agreement proposed at the October 
21, 1999 Mortgagee Review Board meeting.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: 
falsely certified to information in the loan files; used false 
documentation in the origination of mortgage loans; failed to implement 
and maintain a Quality Control Plan; failed to comply with HUD/FHA's 
annual loan origination reporting requirements which supplement the 
requirements of the Home Mortgage Disclosure Act; operated as a real 
estate office using its office space and staff; and allowed employees 
to engage in business

[[Page 53734]]

practices which were, or gave the appearance of, a conflict of 
interest.

39. Homeowners Mortgage and Equity, Inc., Austin, TX

    Action: Proposed settlement agreement that would include the 
indemnification on three loans in which violations of the HUD/FHA 
requirements and regulations occurred.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

40. Home Savings of America FSB, Irwindale, CA

    Action: Proposed settlement agreement that would include the 
indemnification on up to six loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $20,000.
    Cause: A review by HUD's Quality Assurance Division's contractor 
discovered violations of HUD/FHA's Loss Mitigation requirements as well 
as other serious violations of HUD/FHA servicing requirements and 
regulations.

41. HomeSide Lending, Inc., Jacksonville, FL

    Action: Proposed settlement agreement that would include a 
requirement of HomeSide Lending, Inc. to pay the Department $20,000 to 
cover the Department's investigative expenses; and a requirement to 
provide mortgagors with more detailed escrow statements that clearly 
itemize and separately identify all charges.
    Cause: Information on serious violations of HUD/FHA requirements 
and regulations received from HUD's Real Estate Settlement Procedures 
Act Enforcement Division.

42. Irwin Mortgage Corp., Indianapolis, IN

    Action: Proposed settlement agreement that would include the 
indemnification on sixteen loans in which violations of the HUD/FHA 
requirements and regulations occurred.
    Cause: A review by HUD's Office of Inspector General discovered 
serious violations of HUD/FHA requirements and regulations.

43. Island Mortgage Network, Inc.; Melville, NY

    Action: Immediately withdrew the HUD/FHA approval in the Buffalo 
and Albany HUD Office jurisdictions for a period of three years; and 
the payment to the Department of a civil money penalty of $66,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: use 
of appraisals with incomplete or incorrect information; using falsified 
documentation or conflicting information to approve HUD/FHA mortgagors; 
failing to ensure that borrowers met their minimum required investment; 
approving loans where origination documents passed through the hands of 
an interested third party; failing to properly verify the source and 
adequacy of funds for the down payment and/or closing; charging fees 
which are not in compliance with the HUD/FHA guidelines; failing to 
provide loan origination documents for review by HUD/FHA; failing to 
properly display the required FHEO poster; failing to maintain an 
adequate Quality Control Plan; and submitting loans originated by non-
HUD/FHA approved mortgage brokers.

44. James B. Nutter & Company, Kansas City, MO

    Action: Proposed settlement agreement that would include the 
indemnification on loans in which violations of the HUD/FHA's Loss 
Mitigation and other servicing requirements and regulations occurred; 
and the payment to the Department of $145,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA Loss Mitigation requirements and other 
serious violations of HUD/FHA requirements and regulations.

45. J. P. Mortgage Company, North Miami, FL

    Action: Withdrew the HUD/FHA approval for a period of three years; 
and the payment to the Department of a civil money penalty of $75,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: 
failing to comply with HUD/FHA's annual loan origination reporting 
requirements which supplement the requirements of the Home Mortgage 
Disclosure Act; failing to monitor overages to ensure they are not 
being applied in a manner that would violate the Fair Housing Act or 
the Equal Credit Opportunity Act; failing to establish and implement a 
quality control plan for the origination of HUD/FHA-insured mortgages; 
using deceptive or misleading advertising to solicit applicants for 
Title I loans; using false information to originate HUD/FHA-insured 
mortgages; permitting the hand-carrying of a Verification of 
Employment; failing to address discrepancies in documents used to 
originate HUD/FHA-insured mortgages; failing to ensure that borrowers 
met their minimum required investment; and failing to satisfy Direct 
Endorsement underwriter documentation requirements prior to loan 
closing.

46. J & R Mortgage, Inc., San Mateo, CA

    Action: Proposed settlement agreement that would include the 
indemnification on up to nine loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $25,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

47. Legend Mortgage Company, Lisle, IL

    Action: Proposed settlement agreement that would include the 
indemnification on one loan in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $11,000.
    Cause: An audit by HUD's Office of Inspector General discovered 
serious violations of HUD/FHA requirements and regulations.

48. Liberty Mortgage Corporation, Birmingham, AL

    Action: Proposed settlement agreement that would include a 
requirement of Liberty Mortgage Corporation to more closely monitor its 
Quality Control Plan; and the payment to the Department of a civil 
money penalty of $1,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplement the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

49. Madison Home Equities, Inc., Carle Place, NY

    Action: Immediately withdrew the HUD/FHA approval for five years; 
and the payment to the Department of a civil money penalty of $71,500.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: used 
false certifications on loans regarding its financial interest/
relationship to sellers; approved loans where the verification forms 
passed through the hands of an interested third party; used false 
documentation or conflicting information to originate loans and

[[Page 53735]]

obtain HUD/FHA mortgage insurance; approved mortgage loans where the 
ratios exceeded HUD/FHA guidelines; failed to document the borrower's 
source of funds used for downpayment or closing costs; failed to adhere 
to the credit requirements on mortgage loans; failed to ensure that a 
borrower met the requirements to purchase a three unit property; failed 
to properly document irregularities between the appraisal report and 
the sales contract; and failed to ensure appraisals met the 
requirements of HUD/FHA.

50. Major Mortgage Corporation, Livonia, MI

    Action: Proposed settlement agreement that would include the 
indemnification on up to fifteen loans in which violations of HUD/FHA 
requirements and regulations occurred.
    Cause: An audit by HUD's Office of Inspector General discovered 
serious violations of HUD/FHA requirements and regulations.

51. Malone Mortgage Company America, LTD, Carlsbad, CA

    Action: Proposed settlement agreement that would include the 
indemnification on up to one hundred and thirty-nine loans in which 
violations of the HUD/FHA requirements and regulations occurred; 
demonstrate Quality Control improvements; perform an audit, by an 
independent CPA, of all HUD/FHA-insured mortgages originated during the 
last two years; refund all unallowable fees charged mortgagors; and the 
payment to the Department of a civil money penalty of $100,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

52. Mical Mortgage Corporation/FINET Holdings Corporation, San 
Diego, CA

    Action: Withdrew the HUD/FHA approval for a period of three years 
(this extended by two years a prior one year withdrawal action taken by 
the Department due to failure to submit acceptable financial 
statements; and the payment to the Department of a civil money penalty 
of $500,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: 
failing to remit Up-Front Mortgage Insurance Premiums (UFMIP) to HUD/
FHA within 15 days from the date of loan closing and to remit late 
charges and interest penalties; failing to submit loans for endorsement 
in a timely manner; failing to respond to its own quality control 
procedures; failing to reporting business changes to HUD/FHA; and 
failing to have a senior corporate officer designated to conduct 
exclusively its affairs.

53. Mitchell Financial Services, Inc., Tucson, AZ

    Action: Proposed settlement agreement that would include the 
payment to the Department of a civil money penalty of $15,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

54. ML Pacific Investment Capital d.b.a. Pacific Investment Capital 
, Anaheim, CA

    Action: Withdrew the HUD/FHA approval for a period of three years; 
and the payment to the Department of a civil money penalty of $40,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: 
failing to implement a Quality Control Plan; failing to ensure adequate 
face-to-face or telephone interviews were conducted with borrowers; 
utilizing false information and documentation to originate Title I 
loans; and permitting strawbuyers to qualify for Title I loans.

55. Molton, Allen & Williams Corporation, Birmingham, AL

    Action: Proposed settlement agreement that would include the 
indemnification on up to twenty-nine loans in which violations of the 
HUD/FHA requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $20,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA Loss Mitigation requirements and other 
serious violations of HUD/FHA requirements and regulations.

56. Mortgage Acceptance Corporation, Floral Park, NY

    Action: Proposed withdrawal of the HUD/FHA approval for a period of 
three years and the proposed payment to the Department of a civil money 
penalty of $75,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
these serious violations of HUD/FHA requirements and regulations: 
failing to comply with HUD/FHA's annual loan origination reporting 
requirements which supplement the requirements of the Home Mortgage 
Disclosure Act; failing to provide loan origination files and documents 
for review; using falsified or conflicting information in originating 
FHA insured loans; failing to ensure that mortgagors have met their 
minimum required investment because the loan exceeded HUD's maximum 
allowable mortgage amount; failing to conduct a face-to-face or 
adequate interview with first-time homebuyers; sharing office space 
with NRER Realty and commingling employees; and failing to implement 
and maintain an adequate Quality Control Plan.

57. Mortgage by Design, Inc., Brooklyn Park, MN

    Action: Proposed settlement agreement that would include the 
indemnification on up to five loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $2,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

58. Mortgage Co-Op, Inc., Metairie, LA

    Action: Proposed settlement agreement that would include the 
indemnification on three loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $4,000.
    Cause: A review by HUD's Quality Assurance Division and a referral 
from the Department's Denver Homeownership Center's Processing and 
Underwriting Division disclosed serious violations of HUD/FHA 
requirements and regulations.

59. Mortgage Mart, Inc., Blue Bell, PA

    Action: Payment to the Department of a civil money penalty of 
$2,500.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplement the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

60. Mortgage Money Center, Carle Place, NY

    Action: Proposed settlement agreement that would include the 
indemnification on up to seven loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $25,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

[[Page 53736]]

61. National Charter Mortgage Corporation, Gardena, CA

    Action: Proposed settlement agreement that would include adherence 
to its Quality Control Plan; perform quarterly audits of its payments 
of Mortgage Insurance Premiums; and the payment to the Department of a 
civil money penalty of $53,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplement the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

62. Nationsbanc Mortgage Corporation, Charlotte, NC

    Action: Proposed settlement agreement that would include the 
indemnification on up to six loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $29,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

63. Newport Shores Financial, Inc., Aliso Viejo, CA

    Action: Proposed settlement agreement that would include a 
requirement of Newport Shores Financial, Inc. to submit periodic 
reports to the Department on the operation of its branch offices; and 
the payment to the Department of a civil money penalty of $25,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

64. Norwest Mortgage, Inc., Des Moines, IA

    Action: Proposed settlement agreement that would include the 
payment to the Department of a civil money penalty of $75,000; and the 
payment to the Department for the losses suffered, including interest, 
from Norwest Mortgage, Inc's submission of insurance claims on 39 loans 
that were subject to a 1996 settlement agreement.
    Cause: Failure to comply with a Settlement Agreement entered into 
with the Mortgagee Review Board.

65. Norwest Mortgage, Inc., Seattle, WA

    Action: Proposed settlement agreement that would include the 
indemnification on twelve loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $50,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

66. Pacific Charter Mortgage Corporation, Los Alamitos, CA

    Action: Proposed settlement agreement that would include the 
requirement of Pacific Charter Mortgage Corporation to monitor its 
payment of Mortgage Insurance Premiums to ensure all payments are made 
timely; the indemnification on up to ten loans in which violations of 
the HUD/FHA requirements and regulations occurred; and the payment to 
the Department of a civil money penalty of $100,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

67. Pierucci, Inc. d.b.a. Sunset Mortgage Company, Chadds Ford, PA

    Action: Proposed settlement agreement that would include the 
payment to the Department of a civil money penalty of $5,000; and the 
agreement of Sunset Mortgage Company to comply with all HUD/FHA 
requirements and regulations in the future.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

68. Popular Mortgage, Inc. d.b.a. Puerto Rico Home Mortgage, Hato 
Rey, PR

    Action: Proposed settlement agreement that would include the 
indemnification on up to fifty-four loans in which violations of the 
HUD/FHA requirements and regulations occurred.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

69. Professional Mortgage Banker's Corporation, Westbury, NY

    Action: Proposed settlement agreement that would include the 
indemnification on up to nine loans in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $10,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

70. Rhode Island Housing and Mortgage Finance Corporation, 
Providence, RI

    Action: Proposed settlement agreement that would include the 
payment to the Department of a civil money penalty of $16,500. This 
action revised a settlement agreement proposed at the February 18, 1999 
Mortgagee Review Board meeting.
    Cause: A review by HUD's Quality Assurance Division's contractor 
discovered serious violations of HUD/FHA requirements and regulations.

71. Rockwell Equities, Inc., Jericho, NY

    Action: Permanently withdrew the HUD/FHA approval; and proposed the 
payment to the Department of a civil money penalty of $11,000.
    Cause: Failing to comply with the indemnification agreement 
previously negotiated with HUD's Quality Assurance Division.

72. Ryland Mortgage Company, Columbia, MD

    Action: Proposed settlement agreement designed to protect the 
Department during the period between the indictment of Ryland Mortgage 
Company and trial. The settlement agreement includes probation until 
the case was resolved at trial; five year indemnification on all FHA 
loans originated during the period Ryland was indicted until sixty days 
after ultimate resolution of the case; loans originated during this 
period must be sold ``servicing released on the secondary market;'' and 
increased auditing of Ryland's HUD/FHA-insured loans during this 
period. The Mortgagee Review Board considered the matter again after 
Ryland Mortgage Company pleaded guilty and decided to take no further 
action.
    Cause: Indictment and conviction of Ryland Mortgage Company and 
certain senior officers.

73. Summit Mortgage Corporation, Houston, TX

    Action: Proposed settlement agreement that would include the 
indemnification on up to twenty-nine loans in which violations of the 
HUD/FHA requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $75,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

74. SunTrust Mortgage, Inc., Atlanta, GA

    Action: Proposed settlement agreement that would include the 
indemnification on up to eighteen loans in which violations of the HUD/
FHA requirements and regulations occurred;

[[Page 53737]]

and the payment to the Department of a civil money penalty of $54,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA Loss Mitigation requirements and other 
serious violations of HUD/FHA requirements and regulations.

75. Twins, Inc., Columbia, SC

    Action: Proposed settlement agreement that would include the 
refunding of all unallowable fees to mortgagors; and the payment to the 
Department of a civil money penalty of $8,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

76. Unicor Funding, Inc., Mission Viejo, CA

    Action: Proposed settlement agreement that would include the 
indemnification on up to twenty-one loans in which violations of the 
HUD/FHA requirements and regulations occurred; the payment to the 
Department of a civil money penalty of $42,000; and submit an audit of 
its compliance with the Title I requirements to the Department after 
six months.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

77. United Southern Mortgage Corporation of Roanoke, Virginia 
Beach, VA

    Action: Withdrew the HUD/FHA approval for a period of three years; 
and the payment to the Department of a civil money penalty of $250,000.
    Cause: A review by HUD's Quality Assurance Division discovered the 
failure to remit the Up-Front Mortgage Insurance Premiums (UFMIP) on 
sixty-two loans to HUD/FHA within fifteen days after loan closing.

78. Washington Mutual Bank, Seattle, WA

    Action: Proposed settlement agreement that would include the 
indemnification on up to ten loans in which violations of the HUD/FHA 
requirements and regulations occurred; the payment to the Department of 
a civil money penalty of $25,000; and the submission to the Department 
of a plan explaining how Washington Mutual Bank will bring its 
servicing operation into compliance with the Department's Loss 
Mitigation requirements.
    Cause: A review by HUD's Quality Assurance Division's contractor 
discovered failures to comply with HUD/FHA Loss Mitigation requirements 
and other serious violations of HUD/FHA requirements and regulations.

79. West Coast Mortgage Securities, Inc., San Diego, CA

    Action: Proposed settlement agreement that would include the 
indemnification on one loan in which violations of the HUD/FHA 
requirements and regulations occurred; and the payment to the 
Department of a civil money penalty of $1,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
failures to comply with HUD/FHA's annual loan origination reporting 
requirements which supplement the requirements of the Home Mortgage 
Disclosure Act and other serious violations of HUD/FHA requirements and 
regulations.

80. Whitehall Funding, Inc., Indianapolis, IN

    Action: Proposed settlement agreement that would include the 
payment to the Department of a civil money penalty of $10,000.
    Cause: A review by HUD's Quality Assurance Division discovered 
serious violations of HUD/FHA requirements and regulations.

    Dated: August 29, 2000.
William C. Apgar,
Assistant Secretary for Housing--Federal, Housing Commissioner, 
Chairman, Mortgagee Review Board.
[FR Doc. 00-22600 Filed 9-1-00; 8:45 am]
BILLING CODE 4210-27-P