[Federal Register Volume 85, Number 71 (Monday, April 13, 2020)]
[Notices]
[Pages 20510-20516]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07640]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-6163-N-02]
Mortgagee Review Board: Administrative Actions
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, Department of Housing and Urban Development (``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, 451 Seventh 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
Information 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 HUD'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 the
beginning of the FY 19 fiscal year, October 1, 2018, through September
30, 2019 where settlement agreements have been reached.
I. Civil Money Penalties, Withdrawals of FHA Approval, Suspensions,
Probations, and Reprimands
1. Acceptance Capital Mortgage Corporation, Spokane, WA [Docket No. 17-
1723-MR]
Action: On June 26, 2019, the Board voted to withdraw for three
years the FHA approval of Acceptance Capital Mortgage Corp.
(``Acceptance'').
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Acceptance (a) failed to timely
notify HUD/FHA of a September 2014 state sanction; (b) failed to timely
notify HUD/FHA of a November 2014 state sanction; (c) submitted a false
certification to HUD/FHA for fiscal year ended December 31, 2014; (d)
failed to timely notify HUD of a February 2015 state sanction; (e)
submitted a false certification to HUD/FHA for fiscal year ended
December 31, 2015; (f) failed to maintain the minimum adjusted net
worth for the fiscal year ended December 31, 2015; (g) failed to timely
notify HUD/FHA of its net worth deficiency during fiscal year ended
December 31, 2015; (h) failed to timely submit an acceptable audited or
unaudited financial statement to the Secretary of Housing and Urban
Development (``the Secretary'') for fiscal year ended December 31,
2015; and (i) failed to timely notify HUD/FHA of a February 2016 state
sanction.
Previously, the Board had voted to agree to resolve the above
allegations and additional allegations through a negotiated settlement
to which Acceptance Capital had agreed; however, Acceptance Capital
asserted that it had insufficient funds to make the agreed-to civil
money penalty payment of $85,000. In addition to the three-year, the
Board voted to impose civil money penalties of $68,000 for the above
allegations.
2. AmCap Mortgage, Ltd. Houston, TX [Docket No. 20-0021-FC]
Action: On September 19, 2019 the Board voted to accept the terms
of a settlement agreement with AmCap Mortgage (``AmCap'') pursuant to
which AmCap provided the United States $590,098.17, of which
$469,862.27 was designated as restitution. The settlement does not
constitute an admission of liability or fault.
Cause: The Board took this action in conjunction with the
Department of Justice, which negotiated a settlement with AmCap and
which resolved, amongst other things, False Claims Act liability.
Allegations concerned AmCap's failure to meet HUD requirements with
respect to certain FHA-insured mortgages in connection with its
origination and underwriting of FHA-insured mortgages that resulted in
claims submitted to FHA.
3. American Ken, Inc., Diamond Bar, CA [Docket No. 19-1944-MR]
Action: On September 19, 2019 the Board voted to accept a
settlement agreement with American Ken, Inc (``American Ken'') that
required American Ken to pay a civil money penalty in the amount of
$4,500. The settlement did not constitute an admission of liability or
fault.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: American Ken failed to notify
HUD timely of a change in its business structure.
4. American Pacific Mortgage, Roseville, CA [Docket No. 18-1942-MR]
Action: On September 19, 2019, the Board voted to accept a
settlement agreement with American Pacific Mortgage (``American
Pacific'') that required American Pacific to (a) pay a civil money
penalty in the amount of $9,468; and (b) refrain from making any claim
for insurance benefits and/or indemnify HUD/FHA for the life of the
loan for all losses associated with one FHA-insured loan. The
settlement did not constitute an admission of liability or fault.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: American Pacific endorsed or
caused to be endorsed a cash out refinance mortgage without ensuring
that the borrower had made all payments for all mortgages within the
month due for the prior twelve-month period.
5. American Preferred Lending, San Diego, CA [Docket No. 16-1862-MR]
Action: On March 20, 2019, the Board voted to withdraw American
Preferred Lending's (``American Preferred'') FHA approval for a period
of one year.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: American Preferred (a) failed
to timely notify HUD/FHA of sanctions; (b) failed to maintain the
minimum liquid asset requirement for fiscal year ended December 31,
2016; (c) failed to timely notify HUD/FHA of a liquid asset deficiency
and (d) submitted a false certification to HUD/FHA. American Preferred
acknowledged all violations and notified HUD/FHA that it ceased all
business operations and had no employees or remaining assets.
[[Page 20511]]
6. American Southwest Mortgage Corp., Oklahoma City, OK [Docket No. 19-
1923-MRT]
Action: On June 26, 2019, the Board voted to accept the terms of a
settlement agreement with American Southwest Mortgage Corp. (``American
Southwest'') that required American Southwest to pay a civil money
penalty in the amount of $9,000. The settlement did not constitute an
admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: American Southwest (a) failed
to timely submit the required annual certification; (b) failed to
timely remit the annual recertification fee; (c) failed to timely
submit an acceptable audited or unaudited financial statement to the
Secretary of Housing and Urban Development (``the Secretary'') for
fiscal year 2017; (d) failed to timely notify HUD/FHA of an operating
loss exceeding 20 percent of its adjusted net worth in any quarter; and
(e) failed to file the quarterly financial statements required when
operating losses exceed 20 percent of adjusted net worth in any
quarter.
7. AMS Healthcare, Jacksonville, FL [Docket No. 19-1915-MR]
Action: On March 20, 2019, the Board voted to accept the terms of a
settlement agreement with AMS Healthcare (``AMS'') that required AMS to
pay a civil money penalty in the amount of $28,869 and to provide a
capital contribution to in the amount of $28,869. The settlement did
not constitute admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: AMS (a) failed to notify HUD/
FHA of operating losses exceeding 20 percent of adjusted net worth
during fiscal year ended December 31, 2017; (b) failed to file the
quarterly financial statements required when operating losses exceed 20
percent of adjusted net worth in any quarter; and (c) submitted a false
certification to HUD/FHA.
8. Avex Funding Corporation d/b/a Better Mortgage Corp. New York, NY.
[Docket No. 17-1999-MR]
Action: On March 31, 2018, the Board voted to accept the terms of a
settlement agreement with Avex Funding Corporation (``Avex'') that
required Avex to pay a civil money penalty in the amount of $48,000.
The settlement did not constitute an admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Avex Mortgage (a) failed to
timely notify HUD/FHA of an acquisition; (b) failed to timely notify
HUD/FHA of aliases and/or DBA names; (c) failed to timely notify HUD/
FHA of a corporate office address change; (d) failed to timely notify
HUD/FHA of a state sanction; (e) submitted a false annual certification
to HUD/FHA; (f) failed to comply with HUD/FHA annual recertification
requirements; (g) failed to maintain an active license in the state
where its home office is located; (h) submitted an Audited Financial
statement for fiscal year ended December 31, 2017 that revealed
additional violations of HUD regulations and requirements; (i) failed
to notify HUD/FHA of an operating loss greater than twenty percent of
its adjusted net worth; and (j) failed to submit quarterly financial
reports following the loss.
9. Bridgelock Capital Woodland Hills, CA [Docket No.197-1916-MR]
Action: On June 26, 2019, the Board voted to accept a settlement
agreement with Bridgelock Capital (``Bridgelock'') that required
Bridgelock to pay a civil money penalty in the amount of $14,123. The
settlement did not constitute an admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Bridgelock (a) failed to
maintain the minimum adjusted net worth during fiscal year ended
December 31, 2017; (b) failed to timely notify HUD/FHA of its net worth
deficiency; and (c) submitted a false certification to HUD/FHA.
10. Broker Solutions Inc., Tustin, CA [Docket No. 17-2015-MR]
Action: On August 15, 2018, the Board voted to accept a settlement
agreement with Broker Solutions, Inc (``Broker Solutions'') that
required Broker Solutions to pay a civil money penalty in the amount of
$4,500. Broker Solutions also agreed to refrain from making any claim
for insurance benefits and/or indemnify HUD/FHA for the life of the
loan for all losses associated with one FHA insured loan. The
settlement did not constitute an admission of liability or fault.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD. Broker Solutions failed to
follow FHA underwriting guidelines by failing to document and verify
borrower's receipt of gift funds.
11. Carrington Mortgage Services, Anaheim, CA [Docket No. 16-1859-MR]
Action: On October 31, 2018, the Board voted to accept the terms of
a settlement agreement with Carrington Mortgage Services
(``Carrington'') that required Carrington to pay a civil money penalty
in the amount of $311,800. The settlement did not constitute an
admission of liability or fault.
Cause: The Board took this action based on the following alleged
violation of HUD/FHA requirements: Carrington (a) failed to accurately
report the status of defaulted mortgages in HUD's Single Family Default
Monitoring System (``SFDMS'') for a number of months; (b) failed to
timely report loans previously in default had been resolved through
reinstatement; and (c) failed to timely report on loans in default
throughout fiscal year 2016.
12. Compu-Link Corporation d/b/a Celink, Lansing, MI [Docket No. 19-
0016-FC]
Action: On December 20, 2018, the Board voted to accept the terms
of a settlement agreement with Compu-Link d/b/a Celink (``Celink'')
pursuant to which Celink provided the United States $4,250,000, of
which $2,644,602.32 was identified as restitution. The settlement did
not constitute an admission of liability or fault.
Cause: The Board took this action based on the allegation that
Celink violated HUD/FHA requirements for Home Equity Conversion
Mortgages by seeking insurance claims from HUD/FHA after failing to
properly curtail debenture interest. As a result, the United States
alleged Celink obtained debenture interest payments that it was not
entitled to receive on certain claims filed from November 1, 2011 to
May 1, 2016.
13. Eagle Mortgage and Funding, Memphis, TN [Docket No. 18-1803-MR]
Action: On March 20, 2019, the Board voted to accept a settlement
agreement with Eagle Mortgage and Funding (``Eagle'') that required
Eagle to pay a civil money penalty in the amount of $18,468 and for its
owners to provide a capital contribution to Eagle in the amount of
$18,468. The settlement did not constitute an admission of liability or
fault.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: Eagle Mortgage (a) failed to
maintain the minimum adjusted net worth during the fiscal year ending
on December 31, 2016; (b) failed to
[[Page 20512]]
maintain the minimum required liquid assets during fiscal year ended
December 31, 2016; and (c) submitted a false certification to HUD/FHA.
14. First Hallmark Mortgage Corporation, Somerset, NJ [Docket No. 16-
1637-MR]
Action: On September 19, 2019, the Board voted to withdraw First
Hallmark Mortgage Corporation (``First Hallmark''). As First Hallmark
had ceased operations in 2016, HUD withdrew approval for an indefinite
period.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: First Hallmark (a) failed to
implement a quality control plan in accordance with HUD/FHA
requirements; (b) failed to report material findings to HUD/FHA; (c)
failed to comply with HUD/FHA's Tiered Pricing guidelines; (d) failed
to identify and resolve discrepancies and/or conflicting information
contained in documentation used to originate and underwrite FHA-insured
loans; (e) failed to properly document a borrower's stability of
income; and (f) failed to comply with HUD/FHA's requirements regarding
faxed documentation.
15. HFC Funding Corporation, Ridgeland, MS [Docket No. 17-2027-MR]
Action: On December 11, 2018 the Board voted to accept the terms of
a settlement agreement with HFC Funding Corporation (``HFC'') that
required HFC to pay a civil money penalty in the amount of $9,000 and
voluntarily withdraw from HUD/FHA. The settlement did not constitute an
admission of liability or fault.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: HFC (a) failed to timely notify
HUD/FHA that it had an operating loss exceeding 20 percent of its
adjusted net worth in a quarter; (b) failed to file the quarterly
financial statements required when operating losses exceed 20 percent
of adjusted net worth in any quarter; and (c) submitted a false
certification to HUD/FHA.
16. Home America Lending Corp., Patchogue, NY [Docket No. 18-1814-MR]
Action: On March 20, 2019 the Board voted to withdraw Home America
Lending Corp's (``Home America Lending'') FHA approval for a period of
one year.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Home America (a) failed to file
the quarterly financial statements required when operating losses
exceed 20 percent of adjusted net worth in any quarter; and (b) failed
to timely notify HUD/FHA of a state sanction. Home America notified HUD
that it had ceased operations and was no longer originating FHA-insured
loans.
17. Home Approvals Direct a/k/a Home First Mortgage Bankers, Irvine, CA
[Docket No. 19-2020-MR]
Action: On September 19, 2019, the Board voted to accept the terms
of a settlement agreement between the United States and Home Approvals
Direct (``Home Approvals'') which required Home Approvals to pay a
civil money penalty in the amount of $4,500. The settlement did not
constitute an admission of liability or fault.
Cause: The Board took this action based on the following alleged
violation of HUD/FHA requirements: Home Approvals failed to timely
notify HUD/FHA of a change in principal ownership.
18. Horizon Bank, Michigan City, IN [Docket No. 19-1939-MR]
Action: On September 19, 2019, the Board voted to accept a
settlement agreement with Horizon Bank (``Horizon'') that required
Horizon to pay a civil money penalty in the amount of $9,000. The
settlement did not constitute an admission of liability or fault.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: Horizon (a) failed to timely
notify HUD/FHA of a June 1, 2017 merger; and (b) failed to timely
notify HUD/FHA of a March 2019 merger.
19. Huntington National Bank, Cincinnati, OH [Docket No. 17-2012-MR]
Action: On June 18, 2018, the Board voted to accept the terms of a
settlement agreement with Huntington National Bank (``Huntington'')
that required Huntington to pay a civil money penalty in the amount of
$13,968. The settlement did not constitute an admission of liability or
fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Huntington (a) failed to timely
notify HUD within ten business days of a merger with and acquisition of
another entity; and (b) submitted a false certification to HUD/FHA.
20. Interstate Home Loan Center, Inc., Melville, NY [Docket No. 17-
2017-MR]
Action: On June 26, 2019, the Board voted to accept a settlement
agreement with Interstate Home Loan Center (``Interstate'') that
required Interstate to pay a civil money penalty in the amount of
$23,591. The settlement did not constitute an admission of liability or
fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Interstate (a) failed to
maintain the minimum required net worth and liquid assets in fiscal
year ending in 2016; (b) failed to notify HUD/FHA of the deficiencies;
(c) submitted a false certification to HUD/FHA; (d) submitted an annual
financial statement for 2017 which revealed additional violations of
HUD regulations and requirements; and (e) failed to maintain the
minimum required adjusted net worth and liquid assets during fiscal
year 2017.
21. Longbridge Financial LLC, Mahwah, NJ [Docket No. 18-1811-MR]
Action: On June 26, 2019, the Board voted to accept a settlement
agreement with Longbridge Financial, LLC (``Longbridge'') that required
Longbridge to pay a civil money penalty in the amount of $4,500. The
settlement did not constitute an admission of liability or fault.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: Longbridge failed to file the
quarterly financial statements required when operating losses exceed 20
percent of adjusted net worth.
22. Mann Mortgage, LLC, Kalispell, MT [Docket No. 18-1949-MR]
Action: On March 20, 2019, the Board voted to accept the terms of a
settlement agreement with Mann Mortgage, LLC (``Mann'') that required
Mann to pay a civil money penalty in the amount of $14,123. The
settlement did not constitute an admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Mann (a) failed to timely
notify HUD/FHA of a state sanction; and (b) submitted a false
certification to HUD/FHA.
23. Mariners Atlantic Portfolio, LLC., Newport Beach, CA [Docket No.
18-1807-MR]
Action: On March 20, 2019, the Board voted to accept the terms of a
settlement agreement with Mariners Atlantic Portfolio, LLC
(``Mariners'') that
[[Page 20513]]
required Mariners to pay a civil money penalty in the amount of
$13,500. The settlement did not constitute an admission of liability or
fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Mariners (a) failed to timely
submit audited annual financial statements for fiscal year 2016; (b)
failed to maintain the minimum required liquid assets during fiscal
years 2016 and 2017; (c) failed to notify HUD of a liquid asset
deficiency; and (d) submitted a false certification to HUD/FHA.
24. MLB Sub I, LLC, Newport Beach, CA [Docket No. 18-1800-MR]
Action: On March 20, 2019, the Board voted to accept a settlement
agreement with MLB Sub I, LLC (``MLB'') that required MLB to pay a
civil money penalty in the amount of $13,500. The settlement did not
constitute an admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: MLB (a) failed to timely submit
audited annual financial statements for fiscal year 2016; (b) failed to
maintain the minimum required liquid assets during fiscal years 2016
and 2017; and (c) failed to timely notify HUD/FHA of a liquid asset
deficiency.
25. MLD Mortgage, Inc. d/b/a The Money Store, Florham Park, NJ [Docket
No. 17-2007-MR]
Action: On October 31, 2018, the Board voted to accept a settlement
agreement with MLD Mortgage, Inc. (``MLD'') that required MLD to pay a
civil money penalty in the amount of $8,500. The settlement did not
constitute an admission of liability or fault.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: MLD violated the underwriting
guidelines for an FHA-insured mortgage by failing (a) to document that
the mortgagor had an acceptable payment history for eligibility on the
cash-out refinance transaction; and (b) to obtain the payoff statement
for the cash-out refinance.
26. Mortgage Suppliers, Inc., Winchester, KY [Docket No. 17-2014-MR]
Action: On October 31, 2018, the Board voted to accept the terms of
a settlement agreement with Mortgage Suppliers, Inc. (``Mortgage
Suppliers'') that required Mortgage Suppliers to pay a civil money
penalty in the amount of $13,968. The settlement did not constitute an
admission of liability or fault.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: Mortgage Suppliers (a) failed
to timely notify HUD/FHA of a state sanction; and (b) submitted a false
annual certification to HUD/FHA.
27. Nationstar Mortgage, LLC, Irving, TX [Docket No. 16-1682-MR]
Action: On December 11, 2018, the Board voted to accept a
settlement agreement with Nationstar Mortgage, LLC (``Nationstar'')
that required Nationstar to pay a civil money penalty in the amount of
$2,000,000. The settlement did not constitute an admission of liability
or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Nationstar (a) had employed an
ineligible manager; (b) failed to timely notify HUD of a state
sanction; and (3) failed to timely remit monthly mortgage insurance
premiums on numerous occasions from October 2014 through January 2017.
28. Navy Federal Credit Union, Vienna, VA [Docket No. 17-1834-MR]
Action: On March 20, 2019, the Board voted to accept the terms of a
settlement agreement with Navy Federal Credit Union (``Navy Federal'')
that required Navy Federal to pay an administrative payment in the
amount of $500,000 and to refrain from making any claim for insurance
benefits and/or indemnify HUD/FHA for the life of the loan for all
losses associated with six FHA-insured loans. The settlement did not
constitute an admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Navy Federal failed to follow
HUD requirements relating to its FHA quality control plan; failed to
perform loss mitigation in accordance with HUD requirements within its
FHA servicing portfolio; and failed to perform its reporting
obligations to HUD's Single Family Default Monitoring System.
29. Newcastle Home Loans, LLC, Chicago, IL [Docket No. 17-2020-MR]
Action: On June 26, 2019 the Board voted to accept the terms of a
settlement agreement with Newcastle Home Loans, L.L.C. (``Newcastle'')
that required Newcastle to pay a civil money penalty in the amount of
$4,500. The settlement did not constitute an admission of liability or
fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Newcastle failed to file the
quarterly financial statements required when operating losses exceed 20
percent of adjusted net worth.
30. Pacific Horizon Bancorp, Inc., La Crescenta, CA [Docket No. 19-
0023-PF]
Action: On June 26, 2019 the Board voted to accept a proposed
settlement agreement with Pacific Horizon Bancorp (``Pacific Horizon'')
that required Pacific Horizon to pay HUD $325,000. The settlement did
not constitute an admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD pursuant to the Program Fraud
Civil Remedies Act (``PFCRA'') against Pacific Horizon and former loan
officer James Lee and underwriter Vicki Wong: For causing false claims
to be submitted to HUD in connection with underwriting violations and
falsified income found in four FHA loans that closed between 2005 and
2008. HUD had sought civil penalties and assessments in the amounts of
$371,910.54 against Pacific Horizon, $559,662.98 jointly and severally
against Lee and Pacific Horizon, and a further $17,000 against all
Respondents.
31. Pinnacle Lending Group, Inc., Las Vegas, NV [Docket No. 18-1808-MR]
Action: On October 31, 2018 the Board voted to accept a settlement
agreement with Pinnacle Lending Group, Inc (``Pinnacle'') that required
Pinnacle to pay a civil money penalty in the amount of $26,623, for its
owners to provide a capital contribution to Pinnacle in the amount of
$26,623 and submit five consecutive monthly unaudited financial
statements demonstrating that Pinnacle met HUD/FHA's minimum adjusted
net worth. The settlement did not constitute an admission of liability
or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD. Pinnacle (a) failed to notify
HUD/FHA of an unresolved finding when applying for HUD/FHA approval;
(b) failed to timely notify HUD/FHA of a state sanctions; and (c)
submitted a false certification to HUD/FHA.
32. Quicken Loans Inc., Detroit, MI [Docket No. 16-cv-1405]
Action: On May 31, 2019 the Board voted to approve the proposed
resolution and release Quicken Loans Inc. from civil money penalties
and administrative actions in connection
[[Page 20514]]
with the resolution of United States v. Quicken Loans Inc.
Cause: The Board took this action as part of a resolution of United
States v. Quicken Loans Inc. and related disputes.
33. ReNew Lending, Inc. Reno, NV [Docket No. 17-1883-MRT]
Action: On June 26, 2019 the Board voted to accept a settlement
agreement with ReNew Lending, Inc. (``ReNew'') that required ReNew to
pay a civil money penalty in the amount of $4,500. The settlement did
not constitute an admission of liability or fault.
Cause: The Board took this action in recognition of mitigating
factors, and based on the following violations of HUD/FHA requirements
alleged by HUD: ReNew (a) failed to timely submit acceptable audited
financial statements for fiscal year ending 2016; (b) failed to pay the
annual recertification fee for the fiscal year ending in 2016; and (c)
failed to timely notify HUD/FHA of a state sanction.
34. ResMac, Inc., Boca Raton, FL [Docket Nos. 18-1944-MR and 19-2004-
MRT]
Action: On September 19, 2019 the Board voted to accept a
settlement agreement with ResMac Inc. (``ResMac'') that required ResMac
to pay a civil money penalty in the amount of $22,075. The settlement
did not constitute an admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: ResMac (a) violated HUD's
requirements by failing to timely remit periodic monthly mortgage
insurance premiums due to HUD/FHA for billing periods up to and
including December 2017 for three FHA-insured mortgages for a total of
60 payments missed; (b) failed to complete the required annual
certification requirements for the fiscal year ended 2017; (c) failed
to notify HUD of a change in ownership; and (d) failed to meet minimum
adjusted net worth and minimum liquid asset requirements.
35. Reverse Mortgage Solutions, Inc., Houston, TX [Docket No. 18-1817-
MR]
Action: On December 11, 2018 the Board voted to accept the terms of
a settlement agreement with Reverse Mortgage Solutions, Inc.
(``Reverse'') that required Reverse to pay a civil money penalty in the
amount of $4,500. The settlement did not constitute an admission of
liability or fault.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: Reverse failed to file
quarterly financial statements required when operating losses exceed 20
percent of adjusted net worth.
36. Seckel Capital, LLC Newtown, PA [Docket No. 19-008-CSF]
Action: On August 8, 2019, the Board voted to accept a settlement
agreement with Seckel Capital (``Seckel'') that requires Seckel to pay
an amount of $120,000. The settlement did not constitute an admission
of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Seckel Capital (a) submitted
fraudulent audited financial statements for fiscal years ended December
31, 2012; December 31, 2013; December 31, 2014; and December 31, 2015;
(b) submitted false certifications to HUD/FHA for fiscal years ended
December 31, 2013; December 31, 2014; and December 31, 2015; and (c)
submitted 607 FHA loans for insurance that were not eligible for FHA
insurance.
37. Sierra Pacific Mortgage Company, Inc., Folsom, CA [Docket No. 18-
1817]
Action: On December 20, 2018 the Board voted to accept a settlement
agreement with Sierra Pacific Mortgage Company, Inc. (``Sierra
Pacific'') that required Sierra Pacific to pay an amount of $3,669,095,
of which $1,924,406 was identified as restitution. The settlement did
not constitute an admission of liability or wrongdoing.
Cause: The Board took this action based on the allegations that
Sierra Pacific violated HUD/FHA requirements by knowingly causing to be
submitted false claims to payment to the FHA loan insurance program by,
in part, failing to ensure that the loans qualified for FHA insurance
when originated.
38. Skyline Financial Corporation, Calabasas, CA [Docket No. 19-1936-
MR]
Action: On September 19, 2019 the Board voted to issue a Notice of
Administrative Action through which it involuntarily withdrew for one-
year the FHA approval of Skyline Financial Corporation (``Skyline
Financial'').
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Skyline Financial failed to (a)
maintain the minimum adjusted net worth during fiscal year ended
December 31, 2017; and (b) timely notify HUD/FHA of its net worth
deficiency.
39. SN Servicing Corporation, Baton Rouge, LA [Docket No. 17-2021-MR]
Action: On December 11, 2018 the Board voted to accept a settlement
agreement with SN Servicing Corporation (``SN'') that required SN to
pay a civil money penalty in the amount of $46,714. The settlement did
not constitute an admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: SN (a) failed to maintain the
minimum required adjusted net worth for fiscal year ended December 31,
2017; (b) failed to timely notify HUD/FHA of its net worth deficiency;
(c) failed to maintain the minimum required liquid assets during fiscal
year ended December 31, 2016; (d) failed to timely notify HUD/FHA of a
liquid asset deficiency; (e) failed to timely notify HUD/FHA of
operating losses exceeding twenty percent of its adjusted net worth
during fiscal year ended December 31, 2016; (f) failed to file
quarterly financial statements as required following an operating loss
exceeding twenty percent of its adjusted net worth; and (g) submitted a
false certification to HUD/FHA.
40. Southern Fidelity Mortgage LLC, Las Vegas, NV [Docket No. 17-2031-
MR]
Action: On June 26, 2019 the Board voted to accept the terms of a
settlement agreement with Southern Fidelity Mortgage, LLC (``Southern
Fidelity'') that required Southern Fidelity to pay a civil money
penalty in the amount of $13,968. The settlement did not constitute an
admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Southern Fidelity (a) failed to
maintain the minimum required adjusted net worth for fiscal year ended
2016; (b) failed to timely notify HUD/FHA of its net worth deficiency;
and (c) submitted a false certification to HUD/FHA.
41. Spirit Bank, Tulsa, OK [Docket No.19-1922-MRT]
Action: On June 26, 2019 the Board voted to accept a settlement
agreement with Spirit Bank (``Spirit Bank'') that required Spirit Bank
to pay a civil money penalty in the amount of $14,123. The settlement
did not constitute an admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by
[[Page 20515]]
HUD: Spirit Bank failed to (a) timely submit its required annual
recertification for fiscal year ended 2017; (b) timely remit the
recertification fee for fiscal year ended 2017; (c) submit timely an
acceptable financial statement for fiscal year 2017; (d) timely notify
HUD/FHA of an operating loss exceeding 20 percent of its adjusted net
worth in a quarter; and (e) failed to file the quarterly financial
statements required when operating losses exceed 20 percent of adjusted
net worth in a quarter.
42. State Bank, Fenton, MI [Docket No. 17-2013-MR]
Action: On December 11, 2018 the Board voted to accept a settlement
agreement with State Bank (``State'') that required State to pay a
civil money penalty in the amount of $9,000. The settlement did not
constitute an admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: State (a) failed to timely
notify HUD within ten business days of a merger; and (b) submitted a
false certification to HUD/FHA.
43. Stearns Bank, N.A. Saint Cloud, MN [Docket No.: 18-1819-MR]
Action: On October 31, 2018 the Board voted to accept a settlement
agreement with Stearns Bank, N.A (``Stearns Bank'') that required
Stearns Bank to pay a civil money penalty in the amount of $13,968. The
settlement did not constitute an admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Stearns Bank (a) failed to
timely notify HUD/FHA of a sanction; and (b) submitted a false
certification to HUD/FHA.
44. Sun West Mortgage Company, Buena Park, CA [Docket No.: 17-1835-MR]
Action: On September 19, 2019 the Board voted to accept the terms
of a settlement agreement with Sun West Mortgage Company (``Sun West'')
that required Sun West to pay a civil money penalty in the amount of
$149,400, reimburse HUD/FHA in the amount of $83,721.33 for losses HUD/
FHA incurred on two FHA-insured loans, and refrain from making any
claim for insurance benefits and/or indemnify HUD/FHA for the life of
the loan for all losses associated with two FHA-insured loans. The
settlement did not constitute an admission of liability or fault.
Cause: The Board took this action based on violations of HUD/FHA
requirements alleged by HUD including the following: Sun West (a)
failed to verify occupancy or perform the property inspections required
by HUD/FHA with respect to 14 loans on 22 separate occasions; (b)
failed to provide loss mitigation information to a mortgagor's
bankruptcy counsel or bankruptcy trustee; (c) failed to evaluate loans
for all loss mitigation options and document that all loss mitigation
servicing requirements were followed; (d) approved a borrower for a
pre-foreclosure sale without completing the required financial
analysis; (e) failed to independently verify a borrower's income before
entering into forbearance plans; (f) entered into a Special
Forbearance-Unemployment Agreement that included incorrect terms and
failed to include all elements required by HUD/FHA; (g) improperly
charged borrowers inspection fees for property inspections not required
by HUD/FHA; (h) failed to report or accurately report in SFDMS the
occupancy status, default status, and default reason; (i) failed to
implement a quality control plan in compliance with HUD/FHA
requirements; (j) failed to timely remit up front mortgage insurance
premiums; (k) failed to timely notify HUD/FHA of a September 30, 2016
state sanction; and (l) failed to timely notify HUD/FHA of a October
11, 2016 sanction.
45. The Home Loan Expert, L.LC., Saint Louis, MO [Docket No. 18-1809-
MR]
Action: On October 31, 2018, the Board voted to accept a settlement
agreement with The Home Loan Expert, LLC that required The Home Loan
Expert to pay a civil money penalty in the amount of $37,872. The
settlement did not constitute an admission of liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: The Home Loan Expert (a) failed
to maintain the minimum adjusted net worth during fiscal year ended
December 31, 2016; (b) submitted a false certification to HUD/FHA; (c)
failed to report operating losses exceeding 20 percent of its adjusted
net worth; and (d) failed to maintain the minimum adjusted net worth
during fiscal year ended December 31, 2017.
46. Universal Mortgage and Finance, Inc., Edgewater, MD [Docket No. 19-
2011-MR]
Action: On September 19, 2019, the Board voted to accept the terms
of a settlement agreement with Universal Mortgage and Finance, Inc.
(``Universal'') that required Universal to pay a civil money penalty in
the amount of $4,500. The settlement did not constitute an admission of
liability or fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Universal failed to (a)
maintain the minimum required adjusted net worth; and (b) failed to
timely notify HUD/FHA of its net worth deficiency.
47. Western Express Lending, Irvine, Ca. [Docket No. 18-1815-MR]
Action: On March 20, 2019, the Board voted to accept a settlement
agreement with Western Express Lending (``Western Express'') that
required Western Express to pay a civil money penalty in the amount of
$23,904. The settlement did not constitute an admission of liability or
fault.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Western Express (a) failed to
maintain the minimum required adjusted net worth in its fiscal year
ended December 31, 2016; (b) failed to timely notify HUD/FHA of its net
worth deficiency; and (c) submitted a false certification to HUD/FHA.
II. Lenders That Failed To Timely Meet Requirements for Annual
Recertification of HUD/FHA Approval But Came Into Compliance
Action: The Board entered into settlement agreements with the
following lenders, which required the lender to pay a civil money
penalty without admitting fault or liability.
Cause: The Board took these actions based upon allegations that the
listed lenders failed to comply with HUD's annual recertification
requirements in a timely manner.
1. Bedford Lending Corp, Bedford, NH ($9,623) [Docket No. 18-1864-MRT]
2. Cabo Rojo Coop, Cabo Rojo, PR ($4,500) [Docket No. 19-1981-MRT]
3. Citizens First Wholesale Mortgage Company, The Villages, FL ($4,500)
[Docket No. 18-1921-MRT]
4. Consumers National Bank, Minerva, OH ($9,468) [Docket No. 17-1716
MRT]
5. Corum Financial Services, Inc., Ontario, CA ($4,500) [Docket No. 18-
1877-MRT]
6. Fidelity Bank, Wichita, KS ($4,500) [Docket No. 18-1850-MRT]
7. Florida Parishes Bank, Hammond, LA ($4,500) [Docket No. 18-1915-MRT]
8. Global Bank, New York, NY ($4,500) [Docket No. 19-1970-MRT]
9. Gold Coast Bank, Chicago, IL ($4,500) [Docket No. 19-1962-MRT]
[[Page 20516]]
10. Great Lakes Credit Union, Sylvania, OH ($4,500) [Docket No. 18-
1885-MRT]
11. Highlands Union Bank, Abingdon, VA ($4,500) [Docket No. 18-1914-
MRT]
12. Mainstreet Bank, Fairfax, VA ($4,500) [Docket No. 18-1883-MRT]
13. Mutual Federal Bank, Chicago, IL ($4,500) [Docket No. 19-1965-MRT]
14. Quontic Bank FSB, Astoria, NY ($4,500) [Docket No. 19-1968-MRT]
15. Sentinel Federal Credit Union, Rapid City, SD ($4,500) [Docket No.
18-1867-MRT]
16. Signal Financial Federal Credit Union, Kensington, MD ($9,623)
[Docket No. 19-1976-MRT]
17. WNB Financial, N.A. d/b/a Winona National Bank, Winona, MN ($9,623)
[Docket No. 18-1904-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.
Cause: The Board took this action based upon allegations that the
lenders listed below were not in compliance with HUD's annual
recertification requirements.
1. 1st Reliant Home Loans, Inc., Costa Mesa, CA [Docket No. 17-1981-
MRT]
2. AAKO, Inc., Bensalem, PA [Docket No. 20-2048-MRT]
3. ADK Bancorp, Inc., Westminster, CA [Docket No. 18-1822-MR]
4. All Home Lending, Inc., Orange, CA [Docket No. 20-2049-MRT]
5. Alliance Financial Resources, LLC, Scottsdale, AZ [Docket No. 20-
2050-MRT]
6. American Equity Mortgage, Inc., Saint Louis, MO [Docket No. 18-1920-
MRT]
7. American Housing Capital, LLC, Vienna, VA [Docket No. 20-2051-MRT]
8. Approved Funding Corporation, Brooklyn, NY [Docket No. 17-2002-MRT]
9. CalAtlantic Mortgage, Inc., Scottsdale, AZ [Docket No. 20-2052-MRT]
10. Cambridge Mortgage Group L.L.C., Weymouth, MA [Docket No. 18-1861-
MRT]
11. Catalyst Lending, Inc., Greenwood Village, CO [Docket No. 18-1903-
MRT]
12. Chicago Mortgage Solutions Corporation, Lincolnshire, IL [Docket
No. 20-2053-MRT]
13. CityLights Financial Express, Inc., Agoura Hills, CA [Docket No.
20-2054-MRT]
14. Columbus First Bank, Worthington, OH [Docket No. 19-1975-MRT]
15. Directors Financial Group, Costa Mesa, CA [Docket No. 17-1913-MRT]
16. EMC Holdings, L.L.C., Greenwood Village, CO [Docket No. 18-1910-
MRT]
17. First California Mortgage Company, Petaluma, CA [Docket No. 20-
2055-MRT]
18. First Mortgage Company, LLC, Oklahoma City, OK [Docket No. 18-1909-
MRT]
19. First South Bank, Jackson, TN [Docket No. 18-1928-MRT]
20. First Utah Bank, Sandy, UT [Docket No 20-2056-MRT]
21. Gateway Bank Mortgage, Inc., Raleigh, NC [Docket No. 17-1919-MRT]
22. Georgetown Bank, Georgetown, MA [Docket No. 20-2057-MRT]
23. Hartford Financial Services, Schaumburg, IL [Docket No. 20-2058-
MRT]
24. Heartland Credit Union, Hutchinson, KS [Docket No. 18-1866-MRT]
25. Hello Mortgage, Inc., Austin, TX [Docket No. 20-2059-MRT]
26. Home Mortgage Corporation, Atlanta, GA [Docket No. 20-2060-MRT]
27. Hometown Bank of the Hudson Valley, Walden, NY [Docket No. 16-1799-
MRT]
28. Krkabob Incorporated d/b/a Argus Lending Pleasant Hill, CA [Docket
No. 16-1728-MRT]
29. Landmark Mortgage, LLC, Dallas, TX [Docket No. 18-1926-MRT]
30. Lenda, Inc., San Francisco, CA [Docket No. 18-1895-MRT]
31. Liberty Mortgage Company, Columbus, OH [Docket No. 20-2061-MRT]
32. Morton Community Bank, Morton, IL [Docket No. 19-2003-MRT]
33. Peoples State Bank, Lake City, FL [Docket No. 19-1958-MRT]
34. Peoples State Bank of Commerce, Nolensville, TN [Docket No. 18-1900
MRT]
35. Prime Source Mortgage Inc., Murietta, CA [Docket No. 17-2000-MR]
36. Richland State Bank, Rayville, LA [Docket No. 19-1973-MRT]
37. Rubicon Financial Advisors, L.L.C. Minnetonka, MN [Docket No. 20-
2062-MRT]
38. Sagamore Home Mortgage, LLC, Indianapolis, IN [Docket No. 18-1805-
MRT]
39. Sindeo Inc, San Francisco, CA [Docket No. 18-1825-MRT]
40. Soy Capital Bank and Trust Co, Decatur, IL [Docket No. 19-1983-MRT]
41. The Mortgage Company, Inc., West Fargo, ND [Docket No. 18-1907-MRT]
42. Wholesale Capital Corporation, Moreno Valley, CA [Docket No. 20-
2063-MRT]
The Assistant Secretary for Housing--Federal Housing Commissioner,
Chairman, Mortgagee Review Board, Brian D. Montgomery, having reviewed
and approved this document, is delegating the authority to
electronically sign this document to Aaron Santa Anna, who is the
Federal Register Liaison for HUD, for purposes of publication in the
Federal Register.
Dated: April 7, 2020.
Aaron Santa Anna,
Federal Register Liaison, U.S. Department of Housing and Urban
Development.
[FR Doc. 2020-07640 Filed 4-10-20; 8:45 am]
BILLING CODE 4210-67-P