[Federal Register Volume 67, Number 83 (Tuesday, April 30, 2002)]
[Notices]
[Pages 21265-21266]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10601]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4513-N-08]
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 eighth 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
[[Page 21266]]
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.
A terminated mortgagee may apply for a new Origination Approval
Agreement if the mortgagee continues to be an approved mortgagee
meeting the requirements of 24 CFR 202.5, 202.6, 202.7, 202.8 or 202.10
and 202.12, if there has been no Origination Approval Agreement for at
least six months, and if the Secretary determines that the underlying
causes for termination have been remedied. To enable the Secretary to
ascertain whether the underlying causes for termination have been
remedied, a mortgagee applying for a new Origination Approval Agreement
must obtain an independent review of the terminated office's operations
as well as its mortgage production, specifically including the FHA-
insured mortgages cited in its termination notice. This independent
analysis shall identify the underlying cause for the mortgagee's high
default and claim rate. The review must be conducted and issued by an
independent Certified Public Accountant (CPA) qualified to perform
audits under Government Auditing Standards as set forth by the General
Accounting Office. The mortgagee must also submit a written corrective
action plan to address each of the issues identified in the CPA's
report, along with evidence that the plan has been implemented. The
application for a new Agreement should be in the form of a letter,
accompanied by the CPA's report and corrective action plan. The request
should be sent to the Director, Office of Lender Activities and Program
Compliance, 451 Seventh Street, SW., Room B133-P3214, Washington, DC
20410 or by courier to 490 L'Enfant Plaza, East, SW., Suite 3214,
Washington, DC 20024.
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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American Mortgage Link Inc....... 260 First Avenue Tampa, FL.......... 12/21/2001 Atlanta.
North, St
Petersburg, FL
33701.
Dynamic Financial Consultants.... 502 Hamburg Newark, NJ......... 12/21/2001 Philadelphia.
Turnpike, Ste 208,
Wayne, NJ 07470.
Family Home Loan Inc............. 12555 Lakewood Santa Ana, CA...... 12/17/2001 Santa Ana.
Blvd, Ste F,
Downey, CA 90242.
Irwin Mortgage Corporation....... 721 Lyons Road, Cincinnati, OH..... 12/21/2001 Philadelphia.
Dayton, OH 45406.
Neighborhood Mortgage Bankers Inc 695 Bloomfield Newark, NJ......... 09/16/2001 Philadelphia.
Avenue, Montelair,
NJ 07042.
Park Shore Mortgage Corp......... 3645 Bonita Beach Coral Gables, FL... 12/17/2001 Atlanta.
Rd SE, Ste 1,
Bonita Springs, FL
34134.
Sanmar Financial Group Inc....... 110 West Ocean Los Angeles, CA.... 09/16/2001 Santa Ana.
Blvd, Ste 611,
Long Beach, CA
90802.
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Dated: April 24, 2002.
John C. Weicher,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 02-10601 Filed 4-29-02; 8:45 am]
BILLING CODE 4210-27-P