[Federal Register Volume 69, Number 7 (Monday, January 12, 2004)]
[Notices]
[Pages 1754-1756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-509]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4513-N-14]
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
[[Page 1755]]
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 20410-8000; telephone (202)
708-2830 (this is not a toll free number). Persons with hearing or
speech impairments may access that number through 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 sixteenth
review period, HUD is only terminating the Agreement of mortgagees
whose default and claim rate exceeds both the national rate and 225
percent of the field office rate.
Effect: Termination of the Agreement precludes a branch or branches
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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Ace Mortgage Funding Inc....... 777 Beachway Drive, Ste Indianapolis, IN.. 9/18/2003 Atlanta.
300, Indianapolis, IN
46224.
All American Home Mortgage Corp 300 Garden City Plaza, New York, NY...... 9/18/2003 Philadelphia.
226 Garden City, NY
11530.
Central Bank for Savings....... 240 Eisenhower Drive, Jackson, MS....... 9/18/2003 Atlanta.
Biloxi, MS 39535.
CTX Mortgage Company........... 3701 Grand Ave., Ste E, Springfield, IL... 9/23/2003 Atlanta.
Gurnee, IL 60031.
De Oro Inc..................... 1455 South Stapley, Ste Phoenix, AZ....... 9/18/2003 Santa Ana.
2, Mesa, AZ 85204.
International Home Capital Corp 2835 South Jones Blvd., Las Vegas, NV..... 8/5/2003 Santa Ana.
Ste 3, Las Vegas, NV
89146.
Major Mortgage Corp............ 18951 W 12 Mile, Detroit, MI....... 9/18/2003 Philadelphia.
Lathrup Village, MI
48076.
Mid America Mortgage........... 7907 W Cermak Road, Chicago, IL....... 9/18/2003 Atlanta.
North Riverside, IL
60546.
Mortgagestream Financial 8758 Wolf Ct., Ste 203, Denver, CO........ 9/23/2003 Denver.
Services. Westminster, CO 80031.
Suburban Mortgage, Inc......... 7400 E Caley Ave., Ste Denver, CO........ 9/18/2003 Denver.
210, Denver, CO 80111.
Transland Financial Service, 2738 N. Mt. Juliet Nashville, TN..... 9/18/2003 Atlanta.
Inc. Road, Mt. Juliet, TN
37122.
[[Page 1756]]
Transland Financial Service, 311 Germantown Bend Memphis, TN....... 9/18/2003 Atlanta.
Inc. Cove, Cordova, TN
38018.
Trust America Mortgage, Inc.... 2503 Del Prado Blvd., Coral Gables, FL.. 9/18/2003 Atlanta.
Ste 505, Cape Coral,
FL 33904.
Union Planters Bank, NA........ 5201 California Ave., Fresno, CA........ 9/18/2003 Santa Ana.
370,
Bakersfield, CA 93309.
United Mortgage Investors, Inc. 4290 Memorial Dr., Ste Atlanta, GA....... 9/18/2003 Atlanta.
C, Decatur, GA 30032.
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Dated: December 21, 2003.
Margaret Young,
Deputy Assistant Secretary for Finance and Budget.
[FR Doc. 04-509 Filed 1-9-04; 8:45 am]
BILLING CODE 4210-27-P