[Federal Register Volume 69, Number 194 (Thursday, October 7, 2004)]
[Notices]
[Pages 60172-60178]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2530]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4914-N-04]
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,
this notice advises of the cause and description of administrative
actions taken by HUD's Mortgagee Review Board against HUD-approved
mortgagees.
FOR FURTHER INFORMATION CONTACT: David E. Hintz, Acting Secretary to
the Mortgagee Review Board, 451 Seventh Street, SW., Washington, DC
20410-8000, telephone: (202) 708-3856, extension 3594. A
Telecommunications Device for Hearing- and Speech-Impaired Individuals
(TTY) is available at (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, Pub. L. 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 (Board). In compliance with the
requirements of section 202(c)(5), this notice advises of
administrative actions that have been taken by the Board from February
1, 2003 to July 31, 2004.
1. Accent Mortgage Services, Inc., Alpharetta, GA [Docket No. 03-3219-
MR]
Action: Settlement Agreement signed March 26, 2004. Without
admitting fault or liability, Accent Mortgage Services, Inc. (AMS)
agreed to pay a civil money penalty in the amount of $75,000.
Cause: The Board took this action based on the following violations
of HUD and Federal Housing Administration (HUD/FHA) requirements in
origination of HUD/FHA-insured loans where AMS: allowed non-HUD/FHA
approved entities to originate and process HUD/FHA-insured loans that
were registered with HUD, as loans originated and processed by AMS; and
entered into prohibited branch agreements with its branch managers.
2. Advantage Investors Mortgage Corporation, Dallas, TX [Docket No. 01-
1447-MR]
Action: Settlement Agreement signed September 15, 2003. Without
admitting fault or liability, Advantage Investors Mortgage Corporation
(AIM) agreed to pay a civil money penalty in the amount of $247,500.
AIM also agreed to indemnify HUD for any losses incurred on 29 loans.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
AIM: Failed to verify the source and adequacy of funds required for
closing and/or to pay off debts; failed to adequately verify employment
and/or used false and/or inaccurate income to qualify mortgagors;
failed to include or determine all of the mortgagor's liabilities and/
or the liabilities of the non-purchasing spouse in mortgage
qualification; failed to resolve outstanding delinquent federal debt;
failed to obtain required inspections and/or certifications relating to
property eligibility; failed to recalculate the maximum mortgage amount
at closing resulting in an over-insured mortgage; failed to resolve or
clarify important file discrepancies; charged mortgagors excessive or
unallowable fees; failed to retain the entire case file for a minimum
period of two years from the date of insurance endorsement; and failed
to report fraud to HUD.
3. Alliance Mortgage Banking Corporation, Levittown, NY [Docket No. 01-
1571-MR]
Action: Settlement Agreement signed September 17, 2003. Without
admitting fault or liability, Alliance Mortgage Banking Corporation
(AMB) agreed to pay an administrative payment in the amount of
$500,000. AMB also agreed to indemnify HUD for any losses incurred on
three loans.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
AMB: Failed to identify and/or resolve false or conflicting
documentation prior to approving HUD/FHA mortgagors; failed to obtain
sufficient documentation to verify the source and adequacy of funds for
the downpayment and/or closing costs; approved a loan where the
appraiser's estimate of the market value of the property was
significantly inflated; and failed to establish a quality control plan
that conforms with HUD/FHA requirements.
4. Amera Mortgage Corporation, Farmington Hills, MI [Docket No. 03-
3442-MR]
Action: Settlement Agreement signed July 20, 2004. Without
admitting fault or liability, Amera Mortgage Corporation (AMC) agreed
to pay an administrative payment in the amount of $43,000. AMC also
agreed to indemnify HUD for any losses incurred on two loans.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
AMC: Failed to ensure that their employees worked exclusively for AMC;
failed to pay all operating expenses for branch and satellite offices;
failed to ensure their branch managers only managed one branch; shared
branch office space with another entity; failed to properly notify HUD
of its corporate changes; failed to properly verify the source and
adequacy of funds used for downpayment and closing costs; charged
borrowers fees which are not in compliance with HUD/FHA requirements;
and failed to guarantee an interest rate and/or discount points at
least 15 days prior to the date the loan closed.
5. American Union Mortgage, Inc., Sandy, UT [Docket No. 02-1873-MR]
Action: Settlement Agreement signed May 14, 2004. Without admitting
fault or liability, American Union Mortgage, Inc. (AUM) agreed to a pay
civil money penalty in the amount of $150,000.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
AUM: Accepted loans originated by personnel not employed by or not
exclusively employed by AUM; signed false lender certifications
contained in the Addendum to Uniform Residential Loan Applications; and
failed to implement and maintain a quality control plan in compliance
with HUD/FHA requirements.
6. ARC Mortgage, Inc., Saddlebrook, NJ [Docket No. 03-3124-MR]
Action: Settlement Agreement signed April 14, 2004. Without
admitting fault or liability, ARC Mortgage, Inc. (ARC) agreed to pay an
administrative payment in the amount of $40,500. ARC also agreed to
indemnify HUD for any losses incurred on six loans.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination
[[Page 60173]]
of HUD/FHA-insured loans where ARC: Failed to ensure the borrower met
the three percent statutorily required minimum cash investment; used
falsified documentation and/or conflicting information to originate the
loans and obtain HUD/FHA mortgage insurance; failed to properly
document the borrower's income and/or employment; failed to establish
the source and/or adequacy of funds for the downpayment and/or the
costs due at closing; and charged borrowers a $395 commitment fee
without appropriate documentation of an interest rate and/or discount
points lock-in 15 days prior to closing.
7. Bartlett Mortgage, Inc., Bartlett, TN [Docket No. 04-4169-MR]
Action: In a letter dated December 23, 2003, the Board accepted an
offer from Bartlett Mortgage, Inc. (Bartlett) to pay $223,405.78 as
full payment for indemnifications due HUD.
Cause: The Board took this action because Bartlett failed to comply
with the terms of a previously executed indemnification agreement with
the Department.
8. Best Mortgage Inc., Gladstone, MO [Docket No. 04-4271-MR]
Action: Settlement Agreement signed August 3, 2004. Without
admitting fault or liability, Best Mortgage Inc. (Best) agreed to pay
HUD $402,650.43, the full amount due the Department under three
previously executed indemnification agreements.
Cause: The Board took this action because Best failed to comply
with the terms of three Indemnification Agreements executed with the
Department on July 26, 2001.
9. California Housing Finance Agency, Sacramento, CA [Docket No. 02-
2155-MR]
Action: Settlement Agreement signed September 29, 2003. Without
admitting fault or liability, the California Housing Finance Agency
(CHFA) agreed to pay an administrative payment in the amount of
$322,500.
Cause: The Board took this action as a result of CHFA's failure to
perform property inspections on HUD/FHA-insured multifamily projects.
10. Capitol State Mortgage Corporation, Houston, TX [Docket No. 03-
3216-MR]
Action: On November 10, 2003, the Board issued a letter to Capitol
State Mortgage Corporation (CSM) permanently withdrawing its HUD/FHA
approval. The Board also voted to impose a civil money penalty in the
amount of $5,500.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
CSM: Submitted financial statements to HUD that were falsified and were
not audited by a licensed certified public accountant for fiscal years
ending June 30, 1995-1999; and employed and retained an officer,
partner, director or principal at such time when such person was
suspended or debarred.
11. Carlton Mortgage Services, Inc., Palatine, IL [Docket No. 03-3217-
MR]
Action: On April 22, 2004, the Board issued a letter to Carlton
Mortgage Services Inc. (CMS) withdrawing its HUD/FHA approval for three
years. The Board also voted to impose a civil money penalty in the
amount of $126,162.50.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
CMS: Failed to provide evidence that its quality control plan was
implemented and maintained in compliance with HUD/FHA requirements;
failed to timely remit up-front mortgage insurance premiums; failed to
submit loans for endorsement in a timely manner; submitted delinquent
loans for endorsement; and charged commitment fees that were not in
compliance with HUD/FHA requirements.
12. Chapel Mortgage Corporation, Rancocas, NJ [Docket No. 04-4281-MR]
Action: Settlement Agreement signed August 12, 2004. Without
admitting fault or liability, Chapel Mortgage Corporation (CMC) agreed
to pay an administrative payment in the amount of $100,000. CMC also
agreed to indemnify HUD for any losses incurred on 19 loans.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
CMC: failed to identify and/or provide an analysis of prior sales that
occurred within one year of the appraisal report; falsely certified
that the loans were eligible for FHA mortgage insurance; failed to
include/evaluate borrower debt and/or document satisfactory
explanations of the derogatory credit; approved loans with ratios that
exceeds HUD/FHA's established standards without significant
compensating factors; failed to adequately document the source of funds
used for the downpayment and/or closing costs; failed to provide HUD
with the requested quality control reviews; and failed to ensure that
borrowers who had been charged a commitment fee executed a commitment
agreement guaranteeing discount points at least 15 days prior to the
date the loan closed.
13. Charter One Bank NA, Troy, MI [Docket No. 03-3112-MR]
Action: Settlement Agreement signed March 10, 2004. Without
admitting fault or liability, Charter One Bank (COB) agreed to pay an
administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of COB's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
14. Colorado Housing Finance Authority, Denver, CO [Docket No. 03-3107-
MR]
Action: Settlement Agreement signed November 13, 2003. Without
admitting fault or liability, Colorado Housing Finance Authority (CHFA)
agreed to pay an administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of CHFA's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
15. Connecticut Housing Finance Authority, Rocky Hill, CT [Docket No.
03-3231-MR]
Action: Settlement Agreement signed July 7, 2004. Without admitting
fault or liability, Connecticut Housing Finance Authority (CHFA) agreed
to pay an administrative payment in the amount of $15,000.
Cause: The Board took this action as a result of CHFA's failure to
perform property inspections on HUD/FHA-insured multifamily projects.
16. Credit Services Investment Mortgage Corporation, Waco, TX [Docket
No. 02-1791-MR]
Action: Settlement Agreement signed September 17, 2003. Without
admitting fault or liability, Credit Services Investment Mortgage
Corporation (CSI) agreed to pay HUD an administrative payment in the
amount of $16,500.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
CSI: allowed non-HUD approved entities and non-CSI employees to
originate HUD/FHA-insured loans in violation of the HUD/FHA
requirements.
17. Crest Mortgage Company, Dallas, TX [Docket No. 02-1839-MR]
Action: On April 21, 2004, the Board issued a letter to Crest
Mortgage Company (CMC) withdrawing its HUD/FHA approval for five years.
The Board
[[Page 60174]]
also voted to impose a civil money penalty in the amount of $206,500.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
CMC: falsely certified to HUD that the information contained in the
Uniform Residential Loan Application was obtained directly from the
mortgagor by a full time employee of the mortgagee; failed to verify
the transfer of gift funds; failed to verify the source of funds needed
to close loans and/or satisfy delinquent obligations; failed to ensure
that mortgagors met their minimum capital investment requirements;
failed to adequately verify income; failed to resolve discrepancies in
loan documents; failed to implement a quality control plan in
compliance with HUD/FHA requirements; permitted loan documents to be
hand-carried by an interested third party; and permitted an employee
involved in the loan to process the application.
18. CW Capital, LLC, Needham, MA [Docket No. 04-4232-MR]
Action: Settlement Agreement signed July 27, 2004. Without
admitting fault or liability CW Capital, LLC (CWC) agreed to pay HUD an
administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of CWC's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
19. De Oro, Inc., Ontario, CA [Docket No. 03-3127-MR]
Action: Settlement Agreement signed January 13, 2004. Without
admitting fault or liability, De Oro, Inc. (DOI) agreed to pay HUD an
administrative payment in the amount of $175,000. DOI also agreed to
indemnify HUD for any losses incurred on 13 loans.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
DOI: failed to segregate the collection of up-front mortgage insurance
premiums (UFMIP) of HUD-insured mortgages from its general operating
accounts for the years 2001 and 2002; failed to remit timely UFMIP for
the years 2001 and 2002; failed to implement and maintain a quality
control plan in compliance with HUD/FHA guidelines; failed to submit
loans for endorsement in a timely manner; failed to properly evaluate
credit risk; failed to properly verify the source and adequacy of funds
for the downpayment and/or closing costs; failed to properly verify
income; failed to adequately monitor the section 203(k) repair process;
and failed to adequately address conflict of interest situations.
20. Fifth Third Bank, Cincinnati, OH [Docket No. 03-3113-MR]
Action: Settlement Agreement signed September 3, 2003. Without
admitting fault or liability, Fifth Third Bank (FTB) agreed to pay an
administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of FTB's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
21. First American Home Loan & Mortgage Company, Merrillville, IN
[Docket No. 03-3221-MR]
Action: The Board voted to accept First American Home Loan &
Mortgage Company's (FAHL) offer to pay an administrative payment of
$24,500 and repayment of fees improperly charged borrowers.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
FAHL: failed to implement and maintain a quality control plan in
compliance with HUD/FHA requirements for two and a half years; charged
commitment fees that were not in compliance with HUD/FHA requirements;
and charged borrowers unallowable fees.
22. First Banc Mortgage, Inc., Clayton, MO [Docket No. 02-1909-MR]
Action: Settlement Agreement signed September 17, 2003. Without
admitting fault or liability, First Banc Mortgage, Inc. (FBM) agreed to
pay a civil money penalty in the amount of $64,000. FBM also agreed to
indemnify HUD for any losses incurred on four loans.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
FBM: failed to implement and maintain an adequate quality control plan;
failed to report fraud or program abuses to HUD; failed to expand its
quality control reviews after fraud was identified; failed to properly
disclose premium pricing (i.e., when a borrower agrees to a higher
mortgage interest rate in exchange for the mortgagee paying closing and
settlement costs); failed to adequately monitor its pricing policies
and that of its loan correspondents; failed to properly verify the
source and/or adequacy of funds for the downpayment and/or closing
costs; approved loans using false and/or conflicting information;
failed to properly evaluate employment and/or income; failed to include
a liability in the underwriting analysis; and closed a loan the was not
in compliance with the Loan Prospector, an automated underwriting
system.
23. First Community Bank, Kansas City, KS [Docket No. 02-1936-MR]
Action: Settlement Agreement signed March 1, 2004. Without
admitting fault or liability, First Community Bank (FCB) agreed to pay
HUD an administrative payment in the amount of $119,000.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
FCB: Falsely certified to HUD that the information contained in the
Uniform Residential Loan Application was obtained directly from the
mortgagor by a full time employee of the mortgagee; failed to verify
the transfer of gift funds; failed to verify the source of funds needed
to close loans and/or satisfy delinquent obligations; failed to ensure
that mortgagors met their minimum capital investment requirements;
failed to adequately verify income; failed to resolve discrepancies in
loan documents; failed to implement a quality control plan in
compliance with HUD/FHA requirements; and permitted an employee
involved with the loan to process the application.
24. First Community Resources, Inc., St. Louis, MO [Docket No. 04-4382-
MR]
Action: Settlement Agreement signed August 13, 2004. Without
admitting fault or liability, First Community Resources, Inc. (FCR)
agreed to pay civil money penalty in the amount of $16,500.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
FCR: Failed to maintain a quality control plan and conduct quality
control reviews in compliance with HUD/FHA requirements for the years
2001, 2002 and 2003.
25. First Hawaiian Bank, Honolulu, HI [Docket No. 03-3115-MR]
Action: Settlement Agreement signed September 2, 2003. Without
admitting fault or liability, First Hawaiian Bank (FHB) agreed to pay
an administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of FHB's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
26. First Realty Funding, Inc., La Puente, CA [Docket No. 03-3019-MR]
Action: On August 2, 2004, First Realty Funding, Inc. (FRF) was
served
[[Page 60175]]
with the Government's Complaint for Civil Money Penalty in the amount
of $18,500.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
FRF: Failed to implement and maintain a quality control plan; used
independent contractors to originate HUD/FHA-insured mortgages; failed
to file annual reports regarding loan application activities; and
breached an indemnification agreement signed with the Department.
27. Flagstar Bank, Troy, MI [Docket No. 03-3226-MR]
Action: Settlement Agreement signed March 26, 2004. Without
admitting fault or liability, Flagstar Bank (Flagstar) agreed to pay an
administrative payment in the amount of $197,775. Flagstar also agreed
to indemnify HUD for any losses incurred 13 loans.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
Flagstar: Failed to remit timely payment of up-front mortgage insurance
premiums on 1,310 loans; failed to submit 1,035 loans for insurance
endorsement within 60 days from the date of loan closing; failed to
ensure that borrowers on one HUD/FHA-insured loan met their statutorily
required minimum cash investment; failed to properly verify the source
and adequacy of funds used for the downpayment and closing costs;
failed to adequately document income and/or employment used to qualify
the borrower; failed to consider all debts in the calculation of debt
to income ratios; charged the borrowers for unallowable fees; and
failed to ensure that borrowers who had been charged a commitment fee
had executed commitment agreements.
28. Fleet National Bank, Providence, RI [Docket No. 04-4231-MR]
Action: Settlement Agreement signed August 16, 2004. Without
admitting fault or liability, Fleet National Bank (Fleet) agreed to pay
an administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of Fleet's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
29. Group One Mortgage, Inc., Kent, WA [Docket No. 03-3125-MR]
Action: On November 12, 2003, the Board issued a letter to Group
One Mortgage, Inc. (GOM) withdrawing its HUD/FHA approval for three
years. The Board also voted to impose a civil money penalty in the
amount of $148,000.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
GOM: Failed to implement and maintain a quality control plan in
compliance with HUD/FHA requirements; failed to check all parties to
the transaction against the limited denial of participation (LDP) and
General Services Administration (GSA) lists in accordance with HUD/FHA
requirements; failed to comply with HUD/FHA requirements for an
underwriter's compensation; failed to ensure that loan documentation
was not handled by an interested third party; failed to verify the
source and adequacy of funds for the downpayment and/or closing costs;
failed to properly verify and evaluate employment and/or income; and
failed to underwrite loans in accordance with HUD/FHA requirements.
30. GTL Investments, d/b/a John Adams Mortgage Company, Southfield, MI
[Docket No. 04-4138-MR]
Action: Settlement Agreement signed July 16, 2004. Without
admitting fault or liability, John Adams Mortgage Company (JAMC) agreed
to pay an administrative payment in the amount of $20,000.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
JAMC: Failed to ensure that all officers, branch managers and other
employees were exclusive JAMC employees; failed to register a ``Doing
Business As'' name with HUD; charged borrowers fees not permitted by
HUD/FHA; failed to ensure that borrowers who had been charged a
commitment fee executed a commitment agreement guaranteeing interest
rate and/or discount points at least 15 days prior to the date the loan
closed; and failed to provide complete loan origination files for
review.
31. Homestead Financial Services, Inc., Syracuse, NY [Docket No. 01-
1587-MR]
Action: Settlement Agreement signed October 30, 2003. Without
admitting fault or liability, Homestead Financial Services, Inc. (HFS)
agreed to pay a civil money penalty in the amount of $50,000. HFS also
agreed to indemnify HUD for any losses incurred on two loans.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
HFS: Submitted loans for endorsement that were originated by non-HUD/
FHA-approved mortgage brokers; used unsupported/conflicting income
information in the loan approval process; failed to ensure mortgagors
met the statutory minimum required cash investment; and failed to
implement and maintain a quality control plan in compliance with HUD/
FHA requirements.
32. Illinois Housing Development Authority, Chicago, IL [Docket No. 03-
3104-MR]
Action: Settlement Agreement signed September 2, 2003. Without
admitting fault or liability, Illinois Housing Development Authority
(IHDA) agreed to pay an administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of IHDA's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
33. Imperial Financial Lending, Inc., City of Industry, CA [Docket No.
03-3161-MR]
Action: Settlement Agreement signed November 20, 2003. Without
admitting fault or liability, Imperial Financial Lending, Inc. (IFL)
agreed to pay a civil money penalty in the amount of $33,500.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
IFL: failed to maintain a quality control plan in compliance with HUD/
FHA requirements; failed to implement a quality control plan in
compliance with HUD/FHA requirements; permitted a corporate officer to
be affiliated with other lending institutions and/or real estate
entities; failed to file annual reports for Fiscal Years 2000, 2001,
and 2002, regarding loan application activity; and used an independent
contractor agreement with its loan officers that was not in compliance
with HUD/FHA requirements.
34. Kentucky Housing Corporation, Frankfort, KY [Docket No. 03-3027-MR]
Action: Settlement Agreement signed October 31, 2003. Without
admitting fault or liability, Kentucky Housing Corporation (KHC) agreed
to pay an administrative payment in the amount of $5,000.
Cause: The Board took this action as a result of KHC's failure to
perform property inspection on one HUD/FHA-insured multifamily project.
[[Page 60176]]
35. Legacy Mortgage Financial Services, LLC, Orem, UT [Docket No. 03-
3241-MR]
Action: On February 27, 2004, the Board issued a letter to Legacy
Mortgage Financial Services, LLC (LMF) withdrawing its HUD/FHA approval
for three years. The Board also voted to impose a civil money penalty
in the amount of $6,500.
Cause: The Board took this action against LMF because an individual
debarred by HUD for his actions as a principal of a formerly approved
mortgagee, was owner and principal of LMF, in violation of HUD/FHA
requirements.
36. Massachusetts Housing Finance Agency, Boston, MA [Docket No. 03-
3029-MR]
Action: Settlement Agreement signed March 20, 2003. Without
admitting fault or liability, Massachusetts Housing Finance Agency
(MHFA) agreed to pay an administrative payment in the amount of $6,000.
Cause: The Board took this action as a result of MHFA's failure to
perform property inspections on HUD/FHA-insured multifamily projects.
37. MISRA Group, Inc., d/b/a Raintree Mortgage Services, Inc.,
Kennesaw, GA [Docket No. 02-1941-MR]
Action: On May 19, 2003, the Board issued a letter to MISRA Group,
Inc. (MGI) withdrawing its HUD/FHA approval for three years. The Board
also voted to impose a civil money penalty in the amount of $69,500.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
MGI: Failed to ensure that employees worked exclusively for RMS;
submitted falsified documentation to obtain HUD/FHA mortgage insurance;
failed to implement and maintain a quality control plan in compliance
with HUD/FHA requirements; and failed to file the annual report for the
year 2000 regarding loan application activity as required by HUD/FHA
requirements.
38. Montana Board of Housing, Helena, MT [Docket No. 03-3036-MR]
Action: On March 6, 2003, Montana Board of Housing (MBH) was served
with the Government's Complaint for Civil Money Penalty in the amount
of $5,000.
Cause: The Board took this action as a result of MBH's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
39. Mortgage Network, Inc., Cincinnati, OH [Docket No. 03-3158-MR]
Action: Settlement Agreement signed December 29, 2003. Without
admitting fault or liability, Mortgage Network, Inc. (MNI) agreed to
pay a civil money penalty in the amount of $20,000. Additionally, on
February 12, 2004, the Board issued a Letter of Reprimand to MNI.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
MNI: Allowed a non-HUD/FHA-approved mortgage broker to originate HUD/
FHA-insured mortgages; and failed to maintain a quality control plan in
compliance with HUD/FHA requirements.
40. Mount Vernon Mortgage Company, Indianapolis, IN [Docket No. 03-
3094-MR]
Action: Settlement Agreement signed October 13, 2003. Without
admitting fault or liability, Mount Vernon Mortgage Company (MVM)
agreed to pay an administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of MVM's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
41. New Centennial, Inc., Santa Clarita, CA [Docket No. 03-3060-MR]
Action: Settlement Agreement signed November 13, 2003. Without
admitting fault or liability, New Centennial, Inc. (NCI) agreed to pay
a civil money penalty in the amount of $100,000. NCI also agreed to
indemnify HUD for any losses incurred on six loans.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
NCI: Employed a debarred loan officer/branch manager/corporate officer
in violation of HUD/FHA approval standards; violated HUD/FHA third
party origination restrictions by making improper payments to a
mortgage corporation owned by a debarred person or by permitting
employees of other mortgage companies to improperly participate in the
origination of HUD/FHA-insured mortgages; failed to implement and/or
maintain its quality control plan; originated HUD/FHA-insured loans at
branch offices before those branches were approved by HUD; used false
and/or conflicting information to obtain HUD/FHA mortgage insurance;
failed to notify HUD of corporate changes related to address changes,
branch closures and removal of a corporate officer; failed to ensure
that its branch offices had signs that the mortgagee was conducting
business at two locations; permitted its loan officer to work for
another mortgagee while employed by NCI; and charged branches a fee for
performing quality control reviews.
42. New Hampshire Housing Finance Authority, Bedford, NH [Docket No.
03-3239-MR]
Action: Settlement Agreement signed March 10, 2004. Without
admitting fault or liability, New Hampshire Housing Finance Authority
(NHHFA) agreed to pay an administrative payment in the amount of
$3,000.
Cause: The Board took this action as a result of NHHFA's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
43. New Jersey Health Care Facility Financing Authority, Trenton, NJ
[Docket No. 03-3030-MR]
Action: Settlement Agreement signed April 1, 2003. Without
admitting fault or liability, New Jersey Health Care Facility Financing
Authority (NJHC) agreed to pay an administrative payment in the amount
of $3,000.
Cause: The Board took this action as a result of NJHC's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
44. North Star Mortgage Corporation, Dallas, TX [Docket No. 04-4247-MR]
Action: Settlement Agreement signed July 16, 2004. Without
admitting fault or liability, North Star Mortgage Corporation (NSM) and
its president agreed: To an immediate five year withdrawal of its HUD/
FHA approval; to close all loans identified in Attachment A to the
Settlement Agreement within 90 days of the effective date of the
Settlement Agreement; and to pay an administrative payment in the
amount of $175,000. NSM's president, individually, agreed that if there
is a failure by NSM to make the payments due under the Settlement
Agreement that he will personally consent to an immediate three-year
debarment without benefit of any further proceedings by the Department.
NSM's president further agreed not to be an owner or officer of another
HUD/FHA-approved mortgage company for a period of three years from the
effective date of the Settlement Agreement.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
NSM: Failed to ensure that employees worked
[[Page 60177]]
exclusively for NSMC; allowed non-approved, independent mortgage
brokers to process applications and originate HUD/FHA-insured loans;
falsely certified that the information in the Uniform Residential Loan
Application was obtained directly from the borrowers by a full-time
employee or its authorized agents; submitted falsified and/or
conflicting documentation to obtain HUD/FHA mortgage insurance; allowed
payments to individuals who received payments for services related to
the transaction; failed to document the borrowers source of funds used
for downpayment or closing costs; failed to properly document the
borrower's source of income; failed to properly calculate the maximum
mortgage amount; failed to ensure that the borrowers met the 3% minimum
required investment; failed to properly verify the borrower's previous
rental history; failed to provide borrowers with a Good Faith Estimate
within three business days of application; and approved mortgage loans
where borrowers were charged a fee not permitted by HUD/FHA.
45. PFC Corporation, Newport Beach, CA [Docket Nos. 03-3098-MR]
Action: Settlement Agreement signed October 2, 2003. Without
admitting fault or liability, PFC Corporation (PFC) agreed to pay an
administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of PFC's failure to
perform property inspections on HUD/FHA-insured multifamily projects.
46. Prem Mortgage, Inc., d/b/a/First United Mortgage, Las Vegas, NV
[Docket No. 04-4269-MR]
Action: In its July 1, 2004 meeting, the Board voted to impose a
civil money penalty on Prem Mortgage, Inc. (Prem) in the amount of
$128,000.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
Prem: Failed to implement and maintain a quality control plan in
accordance with HUD/FHA requirements; originated HUD/FHA-insured loans
from non-HUD/FHA-approved branches; and failed to assure that
verifications and credit documentation did not pass through the hands
of a third party.
47. Prudential Insurance Company of America, Newark, NJ [Docket No. 03-
3031-MR]
Action: Settlement Agreement signed October 7, 2003. Without
admitting fault or liability, Prudential Insurance Company of America
(PICA) agreed to pay an administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of PICA's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
48. Real Estate Plus Mortgage, Redondo Beach, CA [Docket No. 04-4275MR]
Action: On March 11, 2004, the Board issued a letter to Real Estate
Plus Mortgage (REPM) withdrawing its HUD/FHA approval for three years.
The Board also voted to impose a civil money penalty in the amount of
$6,500.
Cause: The Board took this action because REPM failed to comply
with the terms of a previously executed Indemnification Agreement with
the Department.
49. Reilly Mortgage, McLean, VA [Docket No. 03-3034-MR]
Action: Settlement Agreement signed March 24, 2003. Without
admitting fault or liability, Reilly Mortgage (Reilly) agreed to pay an
administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of Reilly's failure
to perform a property inspection on one HUD/FHA-insured multifamily
project.
50. Ridgewood Savings Bank, Ridgewood, NY [Docket No. 03-3114-MR]
Action: Settlement Agreement signed September 2, 2003. Without
admitting fault or liability, Ridgewood Savings Bank (RSB) agreed to
pay an administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of RSB's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
51. Rocky Mountain Mortgage Specialists, Englewood, CO [Docket No. 03-
3225-MR]
Accent: Settlement Agreement signed June 28, 2004. Without
admitting fault or liability, Rocky Mountain Specialists (RMS) agreed
to pay a civil money penalty in the amount of $92,000, plus an
administrative payment of $25,000. RMS also agreed to indemnify HUD for
any losses incurred on 11 loans.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
RMS: Underwrote and closed HUD/FHA loans for a non-HUD/FHA approved
lender; falsely certified that the information contained in loan
applications was obtained directly from the borrower by a fulltime
employee or its authorized agent; did not notify HUD/FHA when they
became aware that certain HUD/FHA insured loans contained fraudulent
documentation; failed to ensure that loans were properly underwritten;
and failed to document and verify the source of funds used for the
downpayment and closing costs on HUD/FHA-insured loans.
52. Sea Breeze Mortgage Services, Inc., Anaheim, CA [Docket No. 03-
3162-MR]
Action: Settlement Agreement signed November 20, 2003. Without
admitting fault or liability, Sea Breeze Mortgage Services, Inc. (SBM)
agreed to pay an administrative payment of $6,000. SBM also agreed to
pay $77,204.84 as indemnification for HUD losses on two loans.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
SBM: Used falsified documentation to obtain HUD/FHA mortgage insurance;
and failed to analyze the borrower's credit history in accordance with
HUD/FHA requirements.
53. Secure Financial Services, Houston, TX [Docket No. 02-1970-MR]
Action: Settlement Agreement signed November 7, 2003. Without
admitting fault or liability, Secure Financial Services (SFS) agreed to
pay HUD an administrative payment of $150,000.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
SFS: Used prohibited third parties to originate loans; provided
falsified documentation in the origination of one loan; failed to
implement and maintain a quality control plan in compliance with HUD/
FHA requirements; and failed to file annual reports regarding loan
activity.
54. South Texas Mortgage Corporation, Corpus Christi, TX [Docket No.
02-1945-MR]
Action: On August 26, 2003, South Texas Mortgage Corporation (STM)
was served with the Government's Complaint for Civil Money Penalty in
the amount of $109,000.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
STM: Accepted loans originated by personnel not employed by STM; and
failed to implement and maintain a quality control plan in compliance
with HUD/FHA requirements.
[[Page 60178]]
55. Sovereign Bank, FSB, Wyomissing, PA [Docket No. 03-3035-MR]
Action: Settlement Agreement signed May 12, 2003. Without admitting
fault or liability, Sovereign Bank, FSB (Sovereign) agreed to pay an
administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of Sovereign's
failure to perform a property inspection on one HUD/FHA-insured
multifamily project.
56. Stellar Mortgage Company, Houston, TX [Docket No. 01-1577-MR]
Action: On March 25, 2004, Stellar Mortgage Company (SMC) was
served with the Government's Complaint for Civil Money Penalty in the
amount of $173,500.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
SMC: Engaged in a scheme to circumvent HUD/FHA requirements and
submitted false HUD-1 Settlement Statements to HUD; submitted loan
applications containing false information to HUD; failed to implement
and maintain a quality control plan in compliance with HUD/FHA
requirements; and shared office space with employees (other than
receptionists) of another entity.
57. Suburban Mortgage Association, Inc., (SMA), Bethesda, MD [Docket
No. 03-3095-MR]
Action: Settlement Agreement signed September 22, 2003. Without
admitting fault or liability, Suburban Mortgage Association (SMA)
agreed to pay an administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of SMA's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
58. Sunset Mortgage, LP, Franklin Center, PA [Docket No. 03-3171-MR]
Action: Settlement Agreement signed March 26, 2004. Without
admitting fault or liability, Sunset Mortgage, LP (SM) agreed to pay
HUD a civil money penalty in the amount of $76,000.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
SM: Failed to ensure that its registered branches met HUD/FHA
requirements regarding office space and facilities; failed to include a
sign clearly identifying the branch to the public; failed to ensure
that loan applications were taken by authorized employees of SM; and
failed to ensure that its employees worked exclusively for SM.
59. SunTrust Bank, Atlanta, GA [Docket No. 03-3233-MR]
Action: Settlement Agreement signed March 16, 2004. Without
admitting fault or liability, SunTrust Bank (STB) agreed to pay an
administrative payment in the amount of $6,000.
Cause: The Board took this action as a result of STB's failure to
perform property inspections on HUD/FHA-insured multifamily projects.
60. Tennessee Housing Development Agency, Nashville, TN [Docket No. 03-
3242-MR]
Action: Settlement Agreement signed July 22, 2004. Without
admitting fault or liability, Tennessee Housing Development Agency
(THDA) agreed to pay an administrative payment of $3,000.
Cause: The Board took this action as a result of THDA's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
61. Trustmark National Bank (TNB), Jackson, MS [Docket No. 03-3236-MR]
Action: Settlement Agreement signed January 15, 2004. Without
admitting fault or liability, Trustmark National Bank (TNB) agreed to
pay an administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of TNB's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
62. Two Thousand Two New World Mortgage Services, Inc., d/b/a New World
Mortgage, Inc., [Docket No. 03-3157-MR]
Action: On November 12, 2003, the Board issued a letter to New
World Mortgage (NWM) withdrawing its HUD/FHA approval for five years.
The Board also voted to impose a civil money penalty in the amount of
$113,000.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements in origination of HUD/FHA-insured loans where
NWM: Failed to adopt and maintain a quality control plan in accordance
with HUD requirements; failed to implement a quality control plan in
accordance with HUD requirements; allowed an employee who is suspended
under the Department's regulations to participate in the origination of
HUD/FHA-insured loans; and failed to timely notify HUD of a change in
NWM's name.
63. U.S. Bank, NA, Minneapolis, MN [Docket Nos. 03-3049-MR, 03-3072-MR,
03-3235-MR]
Action: Settlement Agreement signed May 12, 2004. Without admitting
fault or liability, U.S. Bank, NA (USB) agreed to pay an administrative
payment of $54,000.
Cause: The Board took this action as a result of USB's failure to
perform property inspections on HUD/FHA-insured multifamily projects.
64. USGI, Inc., La Plata, MD [Docket No. 03-3116-MR]
Action: Settlement Agreement signed October 31, 2003. Without
admitting fault or liability, USGI, Inc. (USGI) agreed to pay an
administrative payment in the amount of $3,000.
Cause: The Board took this action as a result of USGI's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
65. Westminster Mortgage Company, Beverly Hills, CA, [Docket No. 03-
3023-MR]
Action: On May 20, 2003, Westminster Mortgage Company (WMC) was
served with the Government's Complaint for Civil Money Penalty in the
amount of $5,000.
Cause: The Board took this action as a result of WMC's failure to
perform a property inspection on one HUD/FHA-insured multifamily
project.
66. Wisconsin Housing and Economic Development Authority, Madison, WI
[Docket No. 02-2153-MR]
Action: Settlement Agreement signed March 14, 2003. Without
admitting fault or liability, Wisconsin Housing and Economic
Development Authority (WHEDA) agreed to pay an administrative payment
in the amount of $12,000.
Cause: The Board took this action as a result of WHEDA's failure to
perform property inspections on HUD/FHA-insured multifamily projects.
Dated: September 30, 2004.
John C. Weicher,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. E4-2530 Filed 10-6-04; 8:45 am]
BILLING CODE 4210-27-P