[Federal Register Volume 80, Number 65 (Monday, April 6, 2015)]
[Notices]
[Pages 18433-18436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-07868]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5864-N-01]
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)(5) 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: Nancy A. Murray, Secretary to the
Mortgagee Review Board, Department of Housing and Urban Development,
451 7th Street SW., Room B-133/3150, Washington, DC, 20410-8000;
telephone (202) 708-2224 (this is not a toll-free number). Persons with
hearing or speech impairments may access this number through TTY by
calling the toll-free Federal Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION: Section 202(c)(5) of the National Housing
Act (12 U.S.C. 1708(c)(5)) 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 actions that have been taken by the Board in its meetings
from October 1, 2013 to September 30, 2014.
I. Civil Money Penalties, Withdrawals of FHA Approval, Suspensions,
Probations, Reprimands, and Administrative Payments
1. Affiliated Funding Corporation, Santa Ana, CA [Docket No. 14-1550-
MR]
Action: On November 6, 2014, the Board issued a Notice of
Administrative Action permanently withdrawing the FHA approval of
Affiliated Funding Corporation (``AFC'').
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: AFC failed to notify HUD in
accordance with HUD/FHA requirements that it had ceased business
operations and its license was revoked by the State of California
Department of Corporations; failed to comply with HUD's annual
recertification requirements by failing to timely submit audited
financial statements for fiscal year December 31, 2012; failed to
properly underwrite FHA insured loans in accordance with HUD/FHA
requirements in analyzing borrower liabilities, and documenting
borrowers' incomes and gift funds; failed to comply with HUD/FHA's
property flipping requirements; failed to ensure an FHA insured loan
was not used as an investment; failed to resolve Automated Underwriting
System findings and issues relating to appraisal reports; and failed to
refund the unused Upfront Mortgage Insurance Premiums to a borrower.
2. American Fidelity Mortgage Services, Inc., Lisle, IL [Docket No. 14-
1556-MR]
Action: On November 14, 2014, the Board entered into a settlement
agreement with American Fidelity Mortgage Services, Inc. (``AFMS'')
that required AFMS to pay a civil money penalty in the amount of
$10,500 and indemnify the Department for the life of the loan on three
(3) HUD/FHA insured loans.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: AFMS violated HUD/FHA's
underwriting requirements when it approved a mortgage whose term
exceeded the maximum length permitted by HUD; approved a mortgage for a
borrower with unstable income; and approved a mortgage with debt-to-
income ratios which exceeded HUD guidelines without acceptable
compensating factors.
3. First Residential Mortgage Services Corporation, Englewood Cliffs,
NJ [Docket No. 13-1339-MR]
Action: On January 14, 2014 the Board issued a Notice of
Administrative Action withdrawing the FHA approval of First Residential
Mortgage Services Corporation (``FRMSC'') for a period of five (5)
years.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: FRMSC (a) violated the terms of
two repayment plans in accordance with FRMSC's indemnification
agreements with HUD; and (b) failed to adequately document the source
of funds used for a down payment, for closing costs, or for the payment
of outstanding liabilities in connection with thirteen (13) FHA insured
loans.
4. Gateway Bank Mortgage, Inc., Raleigh, NC [Docket No. 13-1545-MR]
Action: On July 3, 2014, the Board entered into a Settlement
Agreement with Gateway Bank Mortgage, Inc. (``GBM'') that required GBM,
without admitting fault or liability, to pay a civil money penalty in
the amount of $98,500 and to indemnify HUD with respect to four (4) FHA
loans for any loss resulting from a default occurring within five (5)
years from the date of endorsement.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: GBM (a) failed to comply with
HUD's Quality Control requirements; (b) failed to conduct pre-
endorsement reviews for Lender Insured loans; (c) failed to retain
documentation in loan files; and (d) failed to properly verify and
document gift funds.
5. JP Morgan Chase Bank NA, Iselin, NJ [Docket No. 13-1540-MR]
Action: On January 31, 2014, the Board voted to provide an
administrative release as part of a settlement agreement between JP
[[Page 18434]]
Morgan Chase Bank, NA (``Chase'') and the United States that required
Chase to pay the United States $614 million, of which HUD received
$564.6 million.
Cause: The Board took this action as a result of an investigation
into FHA mortgage fraud.
6. Liberty Mortgage Corporation, Erie, PA [Docket No. 13-1546-MR]
Action: On July 10, 2014, the Board entered into a Settlement
Agreement with Liberty Mortgage Corporation (``LMC'') that required
LMC, without admitting fault or liability, to pay HUD $294,788.56 for
five outstanding indemnification agreements.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: LMC failed to remit payments to
HUD/FHA in accordance with five (5) previously executed indemnification
agreements.
7. LoanCare LLC f/k/a/FNF Servicing, Inc., Virginia Beach, VA [Docket
No. 13-1323-MR]
Action: On April 10, 2014, the Board entered into a Settlement
Agreement with LoanCare LLC f/k/a FNF Servicing, Inc. (``LoanCare'')
that required LoanCare, without admitting fault or liability, to pay
civil money penalties in the amount of $475,000, to indemnify HUD for
any losses it may incur with respect to one loan, to refund loss
mitigation incentive fees to HUD, and to refund any late fees and
inspection fees improperly charged to borrowers.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: LoanCare failed to comply with
HUD requirements regarding quality control plans, servicing, loss
mitigation, foreclosure, documentation, default reporting, and the
charging of late fees and inspection fees.
8. MB Financial Bank N.A., Chicago, Ill [Docket No.14-1655-MRT]
Action: On June 4, 2014, the Board entered into a Settlement
Agreement with MB Financial (MB) requiring MB, without admitting fault
or liability, to pay an administrative payment in the amount of
$10,000.
Cause: MB failed to timely meet the Department's annual
recertification requirements for its fiscal year ended December 31,
2012, by (a) failing to timely submit its audited financial statements
and supplementary reports; (b) failing to timely pay its
recertification fee; and (c) failing to timely submit its online
certification.
9. Mortgage Now Inc., Shrewsbury, NJ [Docket No. 14-0000-MR]
Action: On August 19, 2014, the Board entered into a Settlement
Agreement with Mortgage Now Inc. (``MN'') that required MN to pay a
civil money penalty in the amount of $22,500, an administrative payment
in the amount of $8,500 and payment in the amount of $37,309.89 under
the terms of a previously signed indemnification agreements, and agreed
to indemnify HUD for any losses it might suffer with respect to one
loan.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: MN (a) failed to notify HUD it
paid a $10,000 fine to the Commonwealth of Pennsylvania's Department of
Banking and Securities, Bureau of Compliance and Licensing relating to
the cancellation of MN's surety bond; (b) failed to notify HUD it was
ordered by the State of California to discontinue disbursing trust
funds in the State due to the cancellation of MN's surety bond; (c)
falsely certified on its 2012 Annual Certification that it had not been
sanctioned by any state agency, and (d) failed to pay HUD amounts it
owed under indemnification agreements.
10. Ofori and Associates, PC., Washington, DC [Docket No. 10-1434-MRT]
Action: On February 18, 2014, the Board issued a Notice of
Administrative Action to withdraw the FHA approval of Ofori and
Associated, P.C., (``Ofori'') for a period of one (1) year.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Ofori failed to meet HUD's
requirement that FHA-approved non-supervised mortgagees must derive at
least 50% of their annual gross revenue from the lending or investing
of funds in real estate mortgages or a directly related field.
11. Residential Lending Services, Inc. Newark, NJ [Docket No. 13-1547-
MR]
Action: On May 13, 2014 the Board issued a Notice of Administrative
Action permanently withdrawing the FHA approval of Residential Lending
Services, Inc., (``RLS'').
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: RLS failed to notify HUD that
it had filed for bankruptcy and ceased operations. In addition, RLS
failed to submit audited financial statements for fiscal years 2011 and
2012.
12. RH Lending, Colleyville, TX [Docket No. 13-1548-MR]
Action: On July 8, 2014, the Board entered into a Settlement
Agreement with RH Lending (``RH'') under which RH, without admitting
fault or liability, agreed not to contest the Board's permanent
withdrawal of RH's FHA approval, and which required RH to pay a civil
money penalty in the amount of $300,000.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: RH (a) submitted a false
certifications on forty-one (41) FHA insured loans; (b) disbursed
manufactured home loan proceeds to an unlicensed installer; (c)
violated HUD's prohibition to pay or accept kickbacks, referral fees
and/or splitting fees; and (d) provided false information, by its CEO,
to the Mortgagee Review Board.
13. Sun Home Loans, Inc., Vineland, NJ [Docket No. 14-1679-MR]
Action: On April 10, 2014, the Board entered into a Settlement
Agreement with Sun Home Loans (``SHL'') that required SHL, without
admitting fault or liability, to pay a civil money penalty in the
amount of $30,000.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: SHL failed to timely notify HUD
of its (a) merger with Sun National Bank; (b) failed to notify HUD it
had a change in its corporate officers; and (c) failed to timely submit
its annual audited financial statements for fiscal years 2011 and 2012.
14. SunTrust Mortgage, Inc., Richmond, VA [Docket No. 12-1651-MR]
Action: On June 16, 2014, the Board voted to release administrative
claims it might have against Suntrust Mortgage, Inc. (``SM''), in
conjunction with a settlement agreement entered into between SM, the
United States, the Consumer Protection Financial Bureau, and several
states that required, among other things, that SM comply with specified
servicing standards, provide certain consumer relief, and pay a
settlement amount of $418 million, of which HUD received $300 million.
Cause: The Board took this action as a result of an investigation
into FHA mortgage fraud.
15. The First Mortgage Corporation, Flossmoor, IL [Docket No. 14-1544-
MR]
Action: On May 13, 2014, the Board issued a Notice of
Administrative Action permanently withdrawing the FHA approval of The
First Mortgage Corporation (``FMC'').
[[Page 18435]]
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: FMC: (a) Failed to notify HUD
that it had ceased operations; (b) failed to notify HUD that it was the
subject of an involuntary Chapter 7 Bankruptcy petition filed on
December 7, 2012; (c) Failed to notify HUD that its license had been
revoked and that a fine was assessed by the Department of Financial and
Professional Regulation, Division of Banking, State of Illinois; and
(d) failed to submit its annual recertification and acceptable audited
financial statement, and to pay the annual recertification fee for its
fiscal year ending June 30, 2013.
16. US Bank, N.A. Minneapolis, MN [Docket No. 12-1541-MR]
Action: On June 25, 2014, the Board voted to provide an
administrative release in conjunction with a Settlement Agreement
entered into between US Bank (``USB'') and the United States that
required USB, without admitting fault or liability, to pay a settlement
amount of $200 million, of which HUD would receive $144,199,970.
Cause: The Board took this action as a result of an investigation
into mortgage fraud.
17. WCS Lending, Boca Raton, FL [Docket No. 12-1645-MR]
Action: On, July 10, 2014, the Board issued a Notice of
Administrative Action withdrawing the FHA approval of WCS Lending
(``WCS'') for a period of five years.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: WCS failed to notify HUD that
it: (a) Had ceased operations; (b) filed an Assignment for the benefit
of Creditors in the State of Florida on December 18, 2013; (c) entered
into a Consent Order with the Commissioner of Banks for the
Commonwealth of Massachusetts on January 13, 2012; and (d) entered into
a Consent Agreement and Order with the Commonwealth of Pennsylvania
Department of Banking, Bureau of Compliance and Licensing and on July
3, 2012. In addition, HUD alleged that WCS submitted a false
certification on its annual recertification dated February 13, 2013,
failed to comply with the terms of (6) indemnification agreements, and
approved an FHA insured loan with excessive debt-to-income ratios.
II. Lenders That Failed To Timely Meet Requirements for Annual
Recertification of HUD/FHA Approval
Action: The Board entered into settlement agreements with the
lenders listed below, which required the lender to pay either a $3,500
or $7,500 civil money penalty without admitting fault or liability.
Cause: The Board took this action based upon allegations that the
lenders listed below failed to comply with the Department's annual
recertification requirements in a timely manner.
1. Citizens Community Credit Union, Fort Dodge, IA ($3,500) [Docket
No. 14-1603-MRT]
2. Community Bank and Trust, Neosho, Mo ($3,500) [Docket No. 14-
1607-MRT]
3. Cooperativa de Ahorro y Credito, Caguas, PR ($3,500) [Docket No.
13-1500-MRT]
4. Coral Mortgage Bankers Corporation, Hackensack, NJ ($3,500)
[Docket No. 14-1699-MRT]
5. First State Bank, Barbourville, WV ($3,500) [Docket No. 14-1724-
MRT]
6. Mortgage.Shop, LLC, Hampton, VA ($7,500) [Docket No. 14-1717-MRT]
7. No. thland Financial, Steele, ND ($3,500) [Docket No. 14-1581-
MRT]
8. STC Capital Bank, St. Charles, IL ($3,500) [Docket No. 14-1622-
MRT]
9. Security First, Cheyenne, WY ($3,500) [Docket No. 14-1616-MRT]
10. Southern Missouri Bank of Marshfield, Marshfield, MO ($3,500)
[Docket No. 14-1568-MRT]
11. Sunmark FCU, Latham, NY ($3,500) [Docket No. 14-1597-MRT]
III. Lenders That Failed To Meet Requirements for Annual
Recertification of HUD/FHA Approval
Action: The Board voted to withdraw the FHA approval of each of the
lenders listed below for a period of one (1) year, or permanently.
Cause: The Board took this action based upon allegations that the
lenders listed below were not in compliance with the Department's
annual recertification requirements.
1. 1st Commonwealth Bank of Virginia, Arlington, VA (One Year
Withdrawal) [Docket No. 15-1511-MRT]
2. Affordable Home Loans, Inc., Midvale, UT (One Year Withdrawal)
[Docket No. 13-1306-MRT]
3. Allstate Financial Services, Pittsburgh, PA (One Year Withdrawal)
[Docket No. 14-1623-MRT]
4. American Home Equity Corp., Irvine, CA (One Year Withdrawal)
[Docket No. 15-1512-MRT]
5. Atlantic Consolidated LLC, Portland, ME (One Year Withdrawal)
[Docket No. 15-1513-MRT]
6. Bankerswest Funding Corp., City of Industry, CA (One Year
Withdrawal) [Docket No. 15-1514-MRT]
7. Bay Bank and Trust Company, Panama City, FL (One Year Withdrawal)
[Docket No. 15-1515-MRT]
8. Bellco First Federal Credit Union, Denver, CO (One Year
Withdrawal) [Docket No. 15-1516-MRT]
9. Brightgreen Home Loans, Inc. Charlotte, CO (One Year Withdrawal)
[Docket No. 15-1517-MRT]
10. Carver Federal Savings Bank, New York, NY (One Year Withdrawal)
[Docket No. 13-1495-MRT]
11. Central Progressive Bank, Lacombe, LA (Permanent Withdrawal)
[Docket No. 15-1518-MRT]
12. Chemung Canal Trust Company, Elmira, NY (One Year Withdrawal)
[Docket No. 14-1663-MRT]
13. CLO Funding Corp. Piscataway, NJ (One Year Withdrawal) [Docket
No. 15-1519-MRT]
14. Community Reinvestment Fund Inc. Minneapolis, MN (One Year
Withdrawal) [Docket No. 14-1468-MRT]
15. Cornerstone Mortgage Center, Inc. Sedalia, MO (Permanent
Withdrawal) [Docket No. 15-1520-MRT]
16. Curtis Mortgage Company, Inc., Knoxville, TN (One Year
Withdrawal) [Docket No. 15-1521-MRT]
17. DTI Employees Credit Union, Flatrock, MI (One Year Withdrawal)
[Docket No. 15-1522-MRT]
18. East West Bank, El Monte, CO (One Year Withdrawal) [Docket No.
15-1523-MRT]
19. Euro International Mortgage, Inc., Delray Beach, FL (One Year
Withdrawal) [Docket No. 15-1524-MRT]
20. Excel Bank, Sedalia, MO (Permanent Withdrawal) [Docket No. 15-
1525-MRT]
21. First Atlantic Mortgage, LLC, Peachtree City, GA (One Year
Withdrawal) [Docket No. 15-1526-MRT]
22. First Meridian Mortgage Corp., Tampa, FL (One Year Withdrawal)
[Docket No. 15-1527-MRT]
23. First New England Mortgage Corp., Nashua, NH (One Year
Withdrawal) [Docket No. 15-1528-MRT]
24. General Electric Employees FCU, Milford, CT (One Year
Withdrawal) [Docket No. 15-1529-MRT]
25. Glasgow, Inc., Greenwood Village, CO (One Year Withdrawal),
[Docket No. 15-1530-MRT]
26. Global Funding Services Corp., Costa Mesa, CA (One Year
Withdrawal) [Docket No. 15-1531-MRT]
27. Grand Rivers Community Bank, Grand Chain, IL (One Year
Withdrawal) [Docket No. 13-1488-MRT]
28. Graystone Solutions, Inc., Sudbury, MA (One Year Withdrawal)
[Docket No. 15-1532-MRT]
29. Highland Mortgage Company, Birmingham, AL (One Year Withdrawal)
[Docket No. 15-1533-MRT]
30. Homebuyers Resource Group, Inc., Baton Rouge, LA (One Year
Withdrawal) [Docket No. 14-1681-MRT]
31. Hyde Park Bank and Trust Co, Chicago, IL (One Year Withdrawal)
[Docket No. 15-1534-MRT]
32. Ideal Federal Savings Bank, Baltimore, MD (Permanent Withdrawal)
[Docket No. 15-1535-MRT]
33. Illinois Service Federal Savings and Loan, Chicago, IL (One Year
Withdrawal) [Docket No. 14-1688-MRT]
34. Ironwood Value Servicer, Inc., New York, NY (One Year
Withdrawal) [Docket No. 15-1536-MRT]
35. L & G Mortgage Banc, Inc., Scottsdale, AZ (One Year Withdrawal)
[Docket No. 15-1537-MRT]
[[Page 18436]]
36. Liberty Bank, FSB, West Des Moines, IA (One Year Withdrawal)
[Docket No. 13-1332-MRT]
37. Litton Loan Servicing, LP, Houston, TX (One Year Withdrawal)
[Docket No. 15-1538-MRT]
38. Massachusetts Housing Investment Corp., Boston, MA (One Year
Withdrawal) [Docket No. 15-1539-MRT]
39. McLaughlin Lending Services, LLC, Lacey, WA (One Year
Withdrawal) [Docket No. 13-1515-MRT]
40. Merchants and Farmers Bank, Kosciusko, MS (One Year Withdrawal)
[Docket No. 15-1540-MRT]
41. Montana Mortgage Company, Kalispell, MT (One Year Withdrawal),
[Docket No. 15-1541-MRT]
42. Morgan Stanley Credit Corp., Vernon Hills, IL (One Year
Withdrawal), [Docket No. 15-1542-MRT]
43. Mortgage Security, Inc., Teaticket, MA (One Year Withdrawal),
[Docket No. 15-1543-MRT]
44. MS Mortgage, LLC, Austin, TX (One Year Withdrawal), [Docket No.
15-1544-MRT]
45. MVB Mortgage Corp., Southfield, MI (One Year Withdrawal),
[Docket No. 15-1546-MRT]
46. Natixis Real Estate Capital, Inc., New York, NY (One Year
Withdrawal), [Docket No. 15-1547-MRT]
47. Neighborhood Credit Union, Dallas, TX (One Year Withdrawal),
[Docket No. 15-1548-MRT]
48. No. thern Mass Telephone Workers Community Credit Union, Lowell,
MA (One Year Withdrawal), [Docket No. 15-1549-MRT]
49. ORNL Federal Credit Union, Oak Ridge, TN (One Year Withdrawal),
[Docket No. 13-1512-MRT]
50. Partner Colorado Credit Union, Arvada, CO (One Year Withdrawal),
[Docket No. 15-1550-MRT]
51. Premier Mortgage Services, Salt Lake City, UT (One Year
Withdrawal), [Docket No. 15-1551-MRT]
52. Rabobank NA, Arroyo Granda, CA (One Year Withdrawal), [Docket
No. 12-1603-MRT]
53. Radclift Capital Mortgage, LLC, New York, NY (One Year
Withdrawal), [Docket No. 15-1552-MRT]
54. Real Mortgage Partners, Inc., Austin, TX (One Year Withdrawal),
[Docket No. 15-1553-MRT]
55. Roy Al Finance and Loan Co., El Segundo, CA (One Year
Withdrawal), [Docket No. 14-1559 and 14-1560-MRT]
56. Saxon Equity Mortgage Bankers, Ltd., Hauppauge, NY (One Year
Withdrawal), [Docket No. 15-1554-MRT]
57. Sierra Pacific Home Loans, Inc., Fresco, CA (One Year
Withdrawal), [Docket No. 15-1555-MRT]
58. Southeastern Capital Corp., Birmingham, AL (One Year
Withdrawal), [Docket No. 15-1556-MRT]
59. State Investors Bank, Metaire, LA (One Year Withdrawal), [Docket
No. 15-1557-MRT]
60. Sunset Mortgage Company, Portland, OR (One Year Withdrawal),
[Docket No. 15-1558-MRT]
61. Sunshine Funding USA LLC, South Portland, ME (One Year
Withdrawal), [Docket No. 15-1559-MRT]
62. Sunshine Savings Bank, Tallahassee, FL (One Year Withdrawal),
[Docket No. 14-1575-MRT]
63. TCIF LLC, Armonk, NY (One Year Withdrawal), [Docket No. 15-1560-
MRT]
64. Texstar Lending, Inc., Dallas, TX (One Year Withdrawal), [Docket
No. 15-1561-MRT]
65. United California Systems International, Los Angeles, CA (One
Year Withdrawal), [Docket No. 13-1516-MRT]
66. Venture One Mortgage Corporation, National City, CA (One Year
Withdrawal), [Docket No. 15-1562-MRT]
67. Virginia Commonwealth Bank, Petersburg, VA (One Year
Withdrawal), [Docket No. 15-1563-MRT]
68. Vision Bank, Panama City Beach, FL (Permanent Withdrawal),
[Docket No. 15-1564-MRT]
Dated: March 27, 2015.
Biniam Gebre,
Acting Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 2015-07868 Filed 4-3-15; 8:45 am]
BILLING CODE 4210-67-P>