[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