[Federal Register Volume 60, Number 98 (Monday, May 22, 1995)]
[Notices]
[Pages 27116-27118]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12460]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing-Federal Housing
Commissioner
[Docket No. FR-3911-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) 708-1515. The Telecommunication
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, 1995 through March 31, 1995.
1. Randall Mortgage, Inc., Maitland, Florida
Action: Proposed Settlement Agreement that includes indemnification
to the Department for any claim losses in connection with seven
improperly originated loans; payment to the Department of a civil money
penalty in the amount of $2,500; and corrective action by the company
to assure compliance with HUD-FHA requirements.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
requirements that included: Failure to maintain an adequate Quality
Control Plan for the origination of HUD-FHA insured mortgages; failure
to verify borrowers' source of funds used for downpayment; failure to
ensure that borrowers made the minimum required investment in the
property; requiring a borrower to deposit excess escrow funds at
closing; inadequate or lack of face-to-face interviews with borrowers;
and failure to properly complete HUD Form 92900 Applications.
2. West Star Financial Corporation, Centennial Park, Arizona
Action: Settlement Agreement that includes payment to the
Department of a civil money penalty in the amount of $35,000;
indemnification for any claim loss in connection with an improperly
originated loan; corrective action to assure compliance with HUD-FHA
requirements; and submission of a report to the Board compiled by an
independent Certified Public Accountant at the end of a six-month
period with respect to the company's compliance with HUD-FHA
requirements.
Cause: A HUD monitoring review which disclosed violations of HUD-
FHA loan servicing and origination requirements that included: Failure
to maintain an adequate Quality Control Plan for the servicing and
origination of HUD-FHA insured mortgages; failure to maintain staff
trained in HUD-FHA requirements; failure to properly service delinquent
mortgages; failure to properly administer the assignment program;
failure to comply with property inspection, preservation and protection
requirements; failure to refund excess escrow funds to mortgagors;
failure to establish controls to ensure timely mortgagor escrow
payments; failure to remit accurate [[Page 27117]] mortgage insurance
premiums; failure to enter into reasonable forebearance agreements;
failure to meet the reporting requirements of the Single Family Default
Monitoring System; failure to timely remit One-Time Mortgage Insurance
Premiums; payment of loan origination fees not proportionate to the
value of work performed; and failure to ensure that borrowed funds were
not used to close a HUD-FHA insured mortgage.
3. F.C. Chadwick Financial, Cerritos, California
Action: A Settlement Agreement that includes indemnification to the
Department for any claim losses in connection with six improperly
originated Title I loans; and corrective action to assure compliance by
the company with HUD-FHA Title I program requirements.
Cause: A HUD monitoring review that cited violations by the company
of HUD-FHA Title I property improvement loan program requirements which
included: Operating an unapproved branch office; payment of ineligible
referral fees; failure to verify the source of borrowers' initial
payment; and failure to meet program requirements for the promissory
note.
4. First Financial Funding Group, Mission Viejo, California
Action: Settlement Agreement that includes indemnification to the
Department for any claim losses in connection with five improperly
originated Title I loans; payment to the Department of a civil money
penalty in the amount of $1,000; and corrective action to assure
compliance with HUD-FHA Title I program requirements.
Cause: A HUD monitoring review that cited violations by the company
of HUD-FHA Title I property improvement loan program requirements that
included: Failure to document the source of funds required for the
borrowers' initial payment; failure to ensure that borrowers provided
detailed descriptions of work improvements; and failure to comply with
HUD-FHA reporting requirements under the Home Mortgage Disclosure Act
(HMDA).
5. Magna Financial Corporation, Irvine, California
Action: Proposed Settlement Agreement that includes indemnification
to the Department for any claim losses in connection with five
improperly originated Title I loans; payment to the Department of a
civil money penalty in the amount of $1,000; and corrective action to
assure compliance with HUD-FHA requirements.
Cause: A HUD monitoring review that disclosed violations by the
company of HUD-FHA Title I property improvement loan program
requirements that included: Failure to verify borrowers' source of
funds required for initial payment; failure to property verify
borrower's income; requiring a minimum loan amount; failure to meet
program requirements for the promissory note; failure to ensure that
detailed descriptions of improvements were provided by borrowers; and
failure to comply with HUD-FHA reporting requirements under the Home
Mortgage Disclosure Act (HMDA).
6. Greystone Servicing Corporation, Inc., New York, New York
Action: Proposed Settlement Agreement that includes a payment to
the Department and assurance by the company of compliance with the
requirements of the Government National Mortgage Association (GNMA).
Cause: Violation of GNMA requirements resulting from the improper
termination of 57 GNMA mortgage-backed securities pools.
7. Whitehall Funding, Inc., Davenport, Iowa
Action: Proposed Settlement Agreement that includes a payment to
the Department and assurance by the company of compliance with the
requirements of the Government National Mortgage Association (GNMA).
Cause: Violation of GNMA requirements resulting from the improper
termination of 13 GNMA mortgage-backed securities pools.
8. Washington Credit Union, Lynwood, Washington
Action: Proposed Settlement Agreement that includes the payment of
a civil money penalty to the Department in the amount of $10,000;
indemnification for one improperly originated Title I loan; and
corrective action to assure compliance with HUD-FHA Title I program
requirements.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
Title I property improvement loan program requirements that included:
Failure to comply with HUD-FHA reporting requirements under the Home
Mortgage Disclosure Act (HMDA); failure to comply with dealer approval
requirements; failure to report to HUD-FHA borrowers' uncompleted
property improvements; failure to resolve a borrower complaint against
a dealer; and failure to verify a borrower's source of funds for the
required initial payment.
9. Indigo Mortgage Services, Inc., Santa Ana, California
Action: Withdrawal of HUD-FHA mortgagee approval.
Cause: Failure by the company to comply with the terms and
conditions of a Settlement Agreement with the Department and to
indemnify HUD in the amount of $49,724 for its claim loss in connection
with an improperly originated HUD-FHA insured mortgage.
10. Beacon Mortgage Company, Dallas, Texas
Action: Letter of Reprimand and proposed civil money penalty in the
amount of $2,000.
Cause: Failure by the company to comply with HUD-FHA requirements
and to submit to the Department physical inspection reports with
respect to two HUD-FHA insured multifamily projects.
11. Mortgage Systems, Inc., d/b/a Associated Mortgage Bankers, Las
Vegas, Nevada
Action: Withdrawal of HUD-FHA mortgagee approval and proposed civil
money penalty in the amount of $75,000.
Cause: A HUD monitoring review that cited the company for
violations of HUD-FHA program requirements which included: Failure to
comply with conditions of probation previously imposed by the Board;
failure to implement an adequate Quality control Plan; failure to remit
mortgage insurance premiums within l5 days after loan closing; failure
to submit closed loans for endorsement within 60 days after loan
closing; failure to meet annual recertification requirements regarding
amount of liquid assets; submission of false information; failure to
document the borrower's source of funds for downpayment and closing
costs; failure to correctly calculate the borrower's income for loan
approval; failure to ensure that the borrower made the minimum required
investment; use of mortgage brokers to originate loans and payment of
``kickbacks'' to such brokers; non-compliance with HUD's conflict-of-
interest prohibited payments provisions; failure to conduct face-to-
face interviews; and allowing loan correspondents to improperly close
loans in the name of the company.
[[Page 27118]] Dated: May 16, 1995.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 95-12460 Filed 5-19-95; 8:45 am]
BILLING CODE 4210-27-P
