[Federal Register Volume 59, Number 96 (Thursday, May 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12207]
[[Page Unknown]]
[Federal Register: May 19, 1994]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing-Federal Housing
Commissioner
[Docket No. N-94-3772; FR-3712-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) of the National Housing Act,
notice is hereby given of the cause and description of administrative
actions taken by HUD's Mortgagee Review Board against HUD-approved
mortgagees.
FOR FURTHER INFORMATION CONTACT: William Heyman, Director, Office of
Lender Activities and Land Sales registration, 451 Seventh Street, SW.,
Washington, DC 20410, telephone (202) 708-1824. The Telecommunications
Device for the Deaf (TDD) number is (202) 708-4594. (These are not
toll-free numbers).
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 in the Federal Register a description
of and the cause for administrative action against a HUD-approved
mortgagee'' by the Department's Mortgagee Review Board. In compliance
with the requirements of Section 202(c)(5), notice is hereby given of
administrative actions that have been taken by the Mortgagee Review
Board from January 1, 1994 through March 31, 1994.
1. Independence Mortgage Corporation of America, Inc., Winter Park,
Florida
Action: Proposed Settlement Agreement that includes indemnification
to the Department for claim losses in connection with ten improperly
originated loans.
Cause: A HUD Office of Inspector General audit that cited the
company for violations of HUD-FHA program requirements that included:
(1) failure to conduct face-to-face interviews with mortgagors; (2)
failure to verify downpayments; (3) miscalculation of the maximum
insurable mortgage amount and required borrower investment; (4) failure
to properly verify and analyze mortgagors' assets, liabilities and
income; and (5) failure to ensure the accuracy of certifications made
to HUD-FHA.
2. Interstate Plus Mortgage, Inc., San Diego, California
Action: Settlement Agreement that includes the cancellation of HUD-
FHA insurance on nine improperly originated loans under the Title I
program, and corrective action to assure compliance with HUD-FHA
requirements.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
Title I property improvement program requirements that included: (1)
failure to report loan fraud by a former loan officer; (2) accepting
brokered loan packages; (3) ``strawbuyers'' and fraudulent
documentation used to originate loans; (4) funding loan packages after
learning of the fraudulent practices by a former loan officer; (5)
failure to properly disburse loan proceeds; (6) loan officer's
acceptance of ``kickbacks'' from loan brokers; and (7) failure to
obtain detailed descriptions of property improvement work to be
performed by borrowers.
3. Middle Tennessee Mortgage, Inc., Dickson, Tennessee
Action: Proposed Settlement Agreement that includes indemnification
to the Department for claim losses in connection with eight improperly
originated loans, payment of a civil money penalty in the amount of
$500 for reporting violations under the Home Mortgage Disclosure Act
(HMDA), and corrective action to assure compliance with HUD-FHA
requirements.
Cause: A HUD monitoring review that cited violations of HUD-FHA
program requirements that included: (1) failure to collect and report
Home Mortgage Disclosure Act (HMDA) data to HUD; (2) failure to comply
with HUD-FHA Quality Control Plan requirements; (3) failure to verify
the source and/or adequacy of the mortgagors' funds for downpayment or
closing costs; (4) failure to obtain documentation to properly evaluate
the borrowers' mortgage credit risk; (5) failure to properly calculate
the borrowers' income; (6) failure to properly credit sweat equity; and
(7) failure to resolve the borrower's derogatory credit.
4. Home Mortgage Company d/b/a Puerto Rico Home Mortgage, Hato Rey,
Puerto Rico
Action: Proposed Settlement Agreement that includes payment of a
civil money penalty in the amount of $10,000, refunds to mortgagors for
excessive and unallowable post endorsement fees, and continued
implementation of corrective actions to assure compliance with HUD-FHA
loan servicing requirements.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
loan servicing requirements that included: (1) untimely quality control
reviews; (2) deducting late fees from mortgagor's escrow accounts prior
to existing surpluses; (3) failure to perform management reviews prior
to foreclosure; (4) excessive and unallowable post endorsement fees;
(5) failure to perform timely property inspections; (6) failure to
timely notify borrowers of the availability of counseling; and (7)
failure to meet the reporting requirements of the Single Family Default
Monitoring System.
5. State Funding, Inc., Corona, California
Action: Proposed Settlement Agreement that includes indemnification
to the Department for one improperly originated loan, corrective action
to assure compliance with HUD-FHA requirements, and payment of a civil
money penalty in the amount of $1,000 based upon violations of Home
Mortgage Disclosure Act (HMDA) reporting requirements, and improper use
of brokers in originating HUD-FHA insured mortgages.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
program requirements that included: (1) failure to report Home Mortgage
Disclosure Act (HMDA) data to HUD; (2) use of mortgage brokers to
assist in the preparation of FHA mortgage applications; (3) payment of
``kickbacks'' to mortgage brokers for referrals of loan applications;
(4) submitting a delinquent loan for endorsement; and (5) failure to
make timely refunds due mortgagors after loans had been paid in full.
6. Continental Capital Corporation, Huntington Station, New York
Action: Letter of Reprimand and proposed civil money penalty in the
amount of $500.
Cause: A HUD monitoring review that cited the company for failure
to comply with HUD-FHA reporting requirements under the Home Mortgage
Disclosure Act (HMDA).
7. All Kern Financial Corporation, Bakersfield, California
Action: Letter of Reprimand and proposed civil money penalty in the
amount of $500.
Cause: A HUD monitoring review that cited the company for failure
to comply with HUD-FHA reporting requirements under the Home Mortgage
Disclosure Act (HMDA).
8. Discount Financial Corporation, Longwood, Florida
Action: Letter of Reprimand and proposed civil money penalty in the
amount of $500.
Cause: A HUD monitoring review that cited the company for failure
to comply with HUD-FHA reporting requirements under the Home Mortgage
Disclosure Act (HMDA).
9. First Guaranty Financial Corporation, Lake Elsinore, California
Action: Proposed Settlement Agreement that includes indemnification
to the Department for one improperly originated loan, and payment of a
civil money penalty in the amount of $1,000.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
requirements that included: failure to verify a mortgagor's assets in
the origination of one loan, failure to implement a Quality Control
Plan, and failure to comply with Home Mortgage Disclosure Act (HMDA)
Reporting Requirements.
10. Lane Mortgage Company, Inc., Lynwood, Colorado
Action: Proposed Settlement Agreement that includes indemnification
to the Department for one improperly originated loan, and payment of a
civil money penalty in the amount of $500.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
requirements that included failure to comply with HUD-FHA reporting
requirements under the Home Mortgage Disclosure Act (HMDA), and failure
to properly establish a mortgagor's effective income in the origination
of one loan.
11. Federated Mortgage Company, Inc., West Covina, California
Action: Letter of Reprimand and proposed civil money penalty in the
amount of $1,000.
Cause: A HUD monitoring review which cited the company for failure
to implement a Quality Control Plan, and failure to comply with the
Home Mortgage Disclosure Act (HMDA) Reporting Requirements.
12. Mortgage Associates, Inc., Lakeland, Florida
Action: Proposed Settlement Agreement that includes indemnification
or a buydown of one overinsured mortgage in the event that additional
documentation is not submitted, and payment of a civil money penalty in
the amount of $1,000.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
requirements that included: (1) one overinsured mortgage; (2) failure
to implement a Quality Control Plan; and (3) failure to comply with
Home Mortgage Disclosure Act (HMDA) requirements.
Dated: May 13, 1994
Nicolas P. Retsinas
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 94-12207 Filed 5-18-94; 8:45 am]
BILLING CODE 4210-27-P
