[Federal Register Volume 68, Number 178 (Monday, September 15, 2003)]
[Notices]
[Pages 53990-53992]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-23329]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4513-N-13]


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 the Department of Housing and 
Urban Development's (HUD) 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.

[[Page 53991]]


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 fifteenth 
review period, HUD is only terminating the Agreement of mortgagees 
whose default and claim rate exceeds both the national rate and 250 
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.
    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 Home Mortgage Company.  951 Eastgate Loop Ste.  Knoxville, TN....         06/23/2003  Atlanta
                                  1300 Chattanooga, TN
                                  37411.
American Mortgage Service, Inc.  8086 Highway 51 North   Memphis, TN......         06/23/2003  Atlanta
                                  Millington, TN 38053.
Approved Mortgage Corp.........  107 N. State Rd. 135,   Indianapolis, IN.         06/23/2003  Atlanta
                                  Ste. 301 Greenwood,
                                  IN 46142.
Capital Mortgage Finance Corp..  2200 Defense Highway    Washington, DC...         05/19/2003  Philadelphia
                                  Ste. 100 Crofton, MD
                                  21114.
Citizens First Mortgage          3145 Tucker Norcross    Atlanta, GA......         06/23/2003  Atlanta
 Solutions, Inc.                  Rd Tucker, GA 30084.
Countrywide Home Loans, Inc....  4700 Hardy St., Ste.    Jackson, MS......         06/23/2003  Atlanta
                                  H
                                  Hattiesburg, MS 39402.
Crest Mortgage Company.........  14850 Montfort Dr Ste.  Dallas, TX.......         06/23/2003  Denver
                                  100 Dallas, TX 75254.
Crest Mortgage Company.........  14850 Montfort Dr Ste.  Fort Worth, TX...         06/23/2003  Denver
                                  100 Dallas, TX 75254.
Decatur Mortgage Company LLC...  6350 Westhaven Dr Ste.  Indianapolis, IN.         06/23/2003  Atlanta
                                  H Indianapolis, IN
                                  46254.
Encore Mortgage Service........  1010 Laurel Oak Corp    Philadelphia, PA.         05/19/2003  Philadelphia
                                  Ctr 301 Voorhees, NJ
                                  08043.
First Community Mortgage, Inc..  3049 Cleveland Ave      Coral Gables, FL.         06/23/2003  Atlanta
                                  Ste. 200 Fort Myers,
                                  FL 33901.
First Security Mortgage Service  13915 Carrollwood       Tampa, FL........         06/23/2003  Atlanta
                                  Village Run Tampa, FL
                                  33624.
Golden Empire Mortgage, Inc....  10535 Foothill Blvd.,   Santa Ana, CA....         06/23/2003  Santa Ana
                                  Ste. 460
                                  Rancho Cucamonga, CA
                                  91730.

[[Page 53992]]

 
Gulf Atlantic Funding Group....  5400 S University Dr    Coral Gables, FL.         06/23/2003  Atlanta
                                  Ste. 603 Davie, FL
                                  33328.
K&B Capital Corporation........  1950 Spectrum Cr        Atlanta, GA......         06/23/2003  Atlanta
                                  400
                                  Marietta, GA 30067.
Key Bank & Trust...............  7F Gwynns Mill Court    Baltimore, MD....         06/23/2003  Philadelphia
                                  Owings Mills, MD
                                  21117.
Nally & Company................  2100 Gardiner Lane      Louisville, KY...         06/23/2003  Atlanta
                                  Ste. 216 Louisville,
                                  KY 40205.
New Heights Capital, LLC.......  2900 Chamblee Tucker    Atlanta, GA......         06/23/2003  Atlanta
                                  Rd, NE Atlanta, GA
                                  30341.
New York Mortgage Bankers......  189-10 Hillside Ave.    New York, NY.....         06/23/2003  Philadelphia
                                  Hollis, NY 11423.
Northland Funding Group, DBA     3305 Northland Dr Ste.  San Antonio, TX..         06/23/2003  Denver
 Capital Mortgage Services.       208 Austin, TX 78731.
Pinnacle Financial Corp........  12600 World Plaza Ln    Coral Gables, FL.         05/19/2003  Atlanta
                                  Fort Myers, FL 33907.
Pryme Investment & Mtg.          491 West 5300 South     Salt Lake City,           05/19/2003  Denver
 Brokers, Inc.                    Murray, UT 84123.       UT.
Radius Capital Corp............  4871 West Avenue M      Los Angeles, CA..         06/23/2003  Santa Ana
                                  Quartz Hill, CA 93536.
Saxon Equities Corp............  300 Motor Parkway       New York, NY.....         06/23/2003   Philadelphia
                                  Hauppauge, NY 11788.
US Mortgage Finance Corp.......  901 Dulaney Valley Rd   Baltimore, MD....         06/23/2003  Philadelphia
                                  Ste. 801 Towson, MD
                                  21204.
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    Dated: September 5, 2003.
John C. Weicher,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 03-23329 Filed 9-12-03; 8:45 am]
BILLING CODE 4210-27-P