[Federal Register Volume 70, Number 77 (Friday, April 22, 2005)]
[Notices]
[Pages 20929-20930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-1885]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4513-N-20]


Credit Watch Termination Initiative

AGENCY: Office of the Assistant Secretary for Housing-Federal Housing 
Commissioner, HUD.

ACTION: Notice.

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SUMMARY: This notice advises of the cause and effect of termination of 
Origination Approval Agreements taken by HUD's Federal Housing 
Administration (FHA) against HUD-approved mortgagees through the FHA 
Credit Watch Termination Initiative. This notice includes a list of 
mortgagees which have had their Origination Approval Agreements 
terminated.

FOR FURTHER INFORMATION CONTACT: The Quality Assurance Division, Office 
of Housing, Department of Housing and Urban Development, 451 Seventh 
Street, SW., Room B133-P3214, Washington, DC 20410-8000; telephone 
(202) 708-2830 (this is not a toll free number). Persons with hearing 
or speech impairments may access that number through TTY by calling the 
Federal Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: HUD has the authority to address 
deficiencies in the performance of lenders' loans as provided in HUD's 
mortgagee approval regulations at 24 CFR 202.3. On May 17, 1999 (64 FR 
26769), HUD published a notice on its procedures for terminating 
Origination Approval Agreements with FHA lenders and placement of FHA 
lenders on Credit Watch status (an evaluation period). In the May 17, 
1999, notice, HUD advised that it would publish in the Federal Register 
a list of mortgagees, which have had their Origination Approval 
Agreements terminated.
    Termination of Origination Approval Agreement: Approval of a 
mortgagee by HUD/FHA to participate in FHA mortgage insurance programs 
includes an Origination Approval Agreement (Agreement) between HUD and 
the mortgagee. Under the Agreement, the mortgagee is authorized to 
originate single family mortgage loans and submit them to FHA for 
insurance endorsement. The Agreement may be terminated on the basis of 
poor performance of FHA-insured mortgage loans originated by the 
mortgagee. The termination of a mortgagee's Agreement is separate and 
apart from any action taken by HUD's Mortgagee Review Board under HUD's 
regulations at 24 CFR part 25.
    Cause: HUD's regulations permit HUD to terminate the Agreement with 
any mortgagee having a default and claim rate for loans endorsed within 
the preceding 24 months that exceeds 200 percent of the default and 
claim rate within the geographic area served by a HUD field office, and 
also exceeds the national default and claim rate. For the 22nd review 
period, HUD is terminating the Agreement of mortgagees whose default 
and claim rate exceeds both the national rate and 200 percent of the 
field office rate.
    Effect: Termination of the Agreement precludes that branch(s) of 
the mortgagee from originating FHA-insured single family mortgages 
within the area of the HUD field office(s) listed in this notice. 
Mortgagees authorized to purchase, hold, or service FHA insured 
mortgages may continue to do so.
    Loans that closed or were approved before the termination became 
effective may be submitted for insurance endorsement. Approved loans 
are (1) those already underwritten and approved by a Direct Endorsement 
(DE) underwriter employed by an unconditionally approved DE lender and 
(2) cases covered by a firm commitment issued by HUD. Cases at earlier 
stages of processing cannot be submitted for insurance by the 
terminated branch; however, they may be transferred for completion of 
processing and underwriting to another mortgagee or branch authorized 
to originate FHA insured mortgages in that area. Mortgagees are 
obligated to continue to pay existing insurance premiums and meet all 
other obligations associated with insured mortgages.
    A terminated mortgagee may apply for a new Origination Approval 
Agreement if the mortgagee continues to be an approved mortgagee 
meeting the requirements of 24 CFR 202.5, 202.6, 202.7, 202.8 or 202.10 
and 202.12, if there has been no Origination Approval Agreement for at 
least six months, and if the Secretary determines that the underlying 
causes for termination have been remedied. To enable the Secretary to 
ascertain whether the underlying causes for termination have been 
remedied, a mortgagee applying for a new Origination Approval Agreement 
must obtain an independent review of the terminated office's operations 
as well as its mortgage production, specifically including the FHA-
insured mortgages cited in its termination notice. This independent 
analysis shall identify the underlying cause for the mortgagee's high 
default and claim rate. The review must be conducted and issued by an 
independent Certified Public Accountant (CPA) qualified to perform 
audits under Government Auditing Standards as provided by the General 
Accounting Office. The mortgagee must also submit a written corrective 
action plan to address each of the issues identified in the CPA's 
report, along with evidence that the plan has been implemented. The 
application for a new Agreement should be in the form of a letter, 
accompanied by the CPA's report and corrective action plan. The request 
should be sent to the Director, Office of Lender Activities and Program 
Compliance, 451 Seventh Street, SW., Room B133-P3214, Washington, DC 
20410-8000 or by courier to 490 L'Enfant Plaza, East, SW., Suite 3214, 
Washington, DC 20024.
     The following mortgagees have had their Agreements terminated by 
HUD:

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                                                                                                                 Termination         Home  ownership
           Mortgagee name                  Mortgagee branch address           HUD office  jurisdictions        effective date            centers
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Alliance Mortgage Capital, Inc......  6500 S Quebec Street, Ste 210,     Denver, CO........................          3/24/2005   Denver.
                                       Englewood, CO 80111.
Benchmark Lending, Inc..............  105 S Wheeler Street, Ste 200,     Jacksonville, FL..................          3/24/2005   Atlanta.
                                       Plant City, FL 33563.
Benchmark Lending, Inc..............  105 S Wheeler Street, Ste 200,     Tampa, FL.........................          3/24/2005   Atlanta
                                       Plant City, FL 33563.
Compass Mortgage, Inc...............  6116 Shallowford Rd, Ste 119,      Knoxville, TN.....................          3/24/2005   Atlanta.
                                       Chattanooga, TN 37421.
Georgia State Mortgage, Inc.........  1395 Iris Drive, Ste 201,          Atlanta, GA.......................          3/24/2005   Atlanta.
                                       Conyers, GA 30013.

[[Page 20930]]

 
Mortgage Matters, Inc...............  695 N Jeff Davis Dr,               Atlanta, GA.......................          3/24/2005   Atlanta.
                                       Fayetteville, GA 30214.
RBC Mortgage Company................  4960 E State St, Rockford, IL      Chicago, IL.......................          2/12/2005   Atlanta.
                                       61108.
Southern Home Lending Corp..........  8833 Perimeter Pk Blvd, Ste 904,   Jacksonville, FL..................          3/24/2005   Atlanta.
                                       Jacksonville, FL 32256.
Stockon Turner, LLC.................  2250 Lucien Way, Ste 140,          Jacksonville, FL..................          3/24/2005   Atlanta.
                                       Maitland, FL 32751.
Synergy Mortgage Corp...............  191 NC Hwy 42 North, Ste J,        Greensboro, NC....................          2/12/2005   Atlanta.
                                       Asheboro, NC 27203.
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    Dated: April 14, 2005.
John C. Weicher,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. E5-1885 Filed 4-21-05; 8:45 am]
BILLING CODE 4210-27-P