E7-24113. Mortgagee Review Board; Administrative Actions

AGENCY:

Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.

ACTION:

Notice.

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, Secretary to the Mortgagee Review Board, 451 Seventh Street, Room B-133 Portals 200, SW., Washington, DC 20410-8000, telephone: [phone], extension 3594. A Telecommunications Device for Hearing- and Speech-Impaired Individuals (TTY) is available at [phone] (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 April 27, 2007 to August 31, 2007.

1. America's Mortgage Resource, Metairie, LA [Docket No. 06-6031-MR]

Action: Settlement Agreement signed August 24, 2007. Without admitting liability or fault, America's Mortgage Resource agreed to pay HUD $64,000. America's Mortgage Resource also agreed that it will not approve any HUD/FHA-insured mortgages in which the borrower is receiving a gift from a downpayment assistance provider unless that provider meets HUD's existing requirements for gift donors, including obtaining 501(c)(3) status from the Internal Revenue Service.

Cause: The Board took this action based on the following violations of HUD/FHA requirements in the origination of HUD/FHA-insured loans where America's Mortgage Resource: Failed to ensure that borrowers received gift funds from acceptable sources; and failed to adopt a Quality Control Plan in accordance with HUD/FHA requirements.

2. Aspen Home Loans, LC, American Fork, UT [Docket No. 06-6028-MR]

Action: On August 16, 2007, the Board issued a letter to Aspen Home Loans, LC (Aspen) immediately withdrawing its HUD/FHA approval for five years.

Cause: The Board took this action based on the following violations of HUD/FHA requirements where Aspen failed to comply with the Board's directive. In a letter dated May 14, 2007, the Board put Aspen on a one year probation and imposed a $6,500 civil money penalty and, directed Aspen to: Provide the Board with Aspen's Senior Management Quality Control reports performed for the preceding six months within thirty days of Aspen's receipt of the Board's Notice letter; a copy of Aspen's current acceptable Quality Control Plan within fifteen days of the Aspen's receipt of the Board's Notice letter; and, copies of Aspen's Senior Management Quality Control reports for the following calendar year, completed quarterly, within thirty days of the end of each quarter.

3. Capital Mortgage Associates, LLC, North Haven, CT [Docket No. 07-7003-MR]

Action: Settlement Agreement signed August 31, 2007. Without admitting liability or fault, Capital Mortgage Associates, LLC (Capital) agreed to make an administrative payment to HUD in the amount of $22,500. Capital also agreed to refund borrowers unallowable fees identified in two loans.

Cause: The Board took this action based on the following violations of HUD/FHA requirements in the origination of HUD/FHA-insured loans where Capital: Allowed an unapproved branch to originate HUD/FHA loans in violation of HUD/FHA requirements; failed to ensure that borrowers were not charged unallowable fees; and failed to adopt a Quality Control Plan in accordance with HUD/FHA requirements.

4. Citybank, Puyallup, WA [Docket No. 07-7013-MR]

Action: Settlement Agreement signed August 14, 2007. Without admitting liability or fault, Citybank agreed to waive all insurance benefits or indemnify HUD on two loans. Citybank also agreed to pay HUD an administrative payment in the amount of $17,500.

Cause: The Board took this action based on the following violations of HUD/FHA requirements in the origination of HUD/FHA-insured loans where Citybank: Failed to verify the source of funds for a gift used by the borrower to meet his/her minimum investment; failed to ensure that borrowers met minimum credit requirements; and failed to reconcile discrepancies in appraisals and/or accepted incomplete appraisal reports.

5. Davis-Penn Mortgage Company, Houston, TX [Docket No. 07-7005-MR]

Action: Settlement Agreement signed May 15, 2007. Without admitting liability or fault, Davis-Penn Mortgage Company (Davis-Penn) agreed to pay HUD an administrative payment in the amount of $83,000.

Cause: The Board took this action based on the following violations of HUD/FHA requirements in the servicing of HUD/FHA-insured loans where Davis-Penn: Failed to report default on two multifamily insured mortgage loans; and failed to elect to assign two multifamily insured mortgage loans that were in default.

6. Mac-Clair Mortgage Corporation, Flint, MI [Docket No. 07-7017-MR]

Action: Settlement Agreement signed August 31, 2007. Without admitting wrongdoing or fault, Mac-Clair Mortgage Corporation (Mac-Clair) agreed to pay HUD an administrative payment in the amount of $10,000. Mac-Clair also agreed to pay the entire debt owed to HUD on five Settlement Agreements in the amount of $915,627.

Cause: The Board took this action because Mac-Clair failed to comply with the terms of the five Settlement Agreements.

7. Pennsylvania Housing Finance Agency, Harrisburg, PA [Docket No. 06-6022-MR]

Action: Settlement Agreement signed May 29, 2007. Without admitting liability or fault, Pennsylvania Housing Finance Agency (PHFA) agreed to pay HUD an administrative payment in the amount of $23,000.

Cause: The Board took this action based on the following violations of HUD/FHA requirements in the servicing of HUD/FHA-insured loans where the PHFA: Failed to report a default in one multifamily insured mortgage loan in accordance with HUD/FHA requirements; failed to timely elect whether to assign the multifamily insured mortgage loan that was in default; and failed to assign the mortgage to HUD within 30 days from the date of the election to assign the mortgage to HUD.

8. Synergy Mortgage Corporation, Waco, TX [Docket No. 06-6021-MR]

Action: Settlement Agreement signed August 14, 2007. Without admitting liability or fault, Synergy Mortgage Corporation (Synergy) agreed to pay HUD an administrative payment in the amount of $410,000. Synergy also agreed that Synergy, Synergy Bank and Premier Bancshares, Inc., and any existing or newly created subsidiaries or affiliates of these entities shall not seek HUD/FHA approval as mortgagee for a period of five 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 the origination of HUD/FHA-insured loans where Synergy: Failed to properly document, and calculate income; omitted and understated liabilities for loan qualification; failed to properly verify the source and adequacy of funds for the borrower's minimum required investment; failed to ensure property eligibility for HUD/FHA mortgage insurance; closed loans in excess of the maximum allowable amount by failing to consider inducements to purchase in computing the mortgage amount and failing to resolve conflicting information regarding the sales price; and approved a mortgage loan with an excessive debt to income ratio without adequate compensating factors.

9. Tranah Asset Management Corporation, San Antonio, TX [Docket No. 06-6030-MR]

Action: Settlement Agreement signed April 27, 2007. Without admitting liability or fault, Tranah Asset Management Corporation (Tranah) agreed to pay HUD an administrative payment in the amount of $45,000.

Cause: The Board took this action based on the following violation of HUD/FHA requirements in the origination of HUD/FHA-insured loans where Tranah permitted a debarred mortgagee to participate in the HUD/FHA mortgage insurance program.

10. Wall Street Financial Corporation, Fairfield, NJ [Docket No. 04-4264-MR]

Action: Settlement Agreement signed May 17, 2007. Without admitting liability or fault, Wall Street Financial Corporation (Wall Street) agreed to pay HUD an administrative payment in the amount of $19,500. Wall Street also agreed to refund unallowable fees identified in 50 loans to mortgagors within 30 days of the effective date of the Settlement Agreement.

Cause: The Board took this action based on the following violations of HUD/FHA requirements in the origination of HUD/FHA-insured loans where Wall Street: Approved mortgages with debt-to-income ratios that exceeded HUD/FHA standards without adequate compensating factors in nine mortgages; failed to adequately document the source of funds used for the downpayment or closing costs in one mortgage; failed to ensure that borrowers whom Wall Street charged a commitment fee, executed a Commitment Agreement guaranteeing discount points and/or interest rates at least fifteen days prior to closing; and charged unallowable fees for title review by an attorney, and/or overcharged for obtaining credit reports.

Dated: December 6, 2007.

Brian D. Montgomery,

Assistant Secretary for Housing—Federal, Housing Commissioner.