[Federal Register Volume 62, Number 88 (Wednesday, May 7, 1997)]
[Notices]
[Pages 24967-24968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11810]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4209-N-02]
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: Morris E. Carter, Director, Office of
Lender Activities and Program Compliance, 451 Seventh Street, S.W.,
Washington, DC 20410, telephone: (202) 708-1515. (This is not a toll-
free number). A Telecommunications Device for Hearing and Speech-
Impaired Individuals (TTY) is available at l-800-877-8339 (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. 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, 1997 through April 11, 1997.
1. Barrons Mortgage Corporation, Brea, California
Action: Settlement Agreement that includes: indemnification to the
Department for claim losses in connection with seven improperly
originated property improvement loans under the HUD-FHA Title I
property improvement loan program; payment to the Department of a civil
money penalty in the amount of $2,000; and corrective action to assure
compliance with HUD-FHA requirements.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
Title I program requirements that included: use of alleged false tax
returns to qualify borrowers for loans; accepting verifications of
employment and W-2 forms containing inconsistent information to qualify
borrowers; permitting non-approved brokers to originate loans;
accepting insufficient cost estimates; and use of misleading
advertising.
2. Comstock Mortgage, Sacramento, California
Action: Settlement Agreement that includes: payment to the
Department of a civil money penalty in the amount of $4,000; and
corrective action to assure compliance with HUD-FHA requirements.
Cause: A HUD monitoring review that cited violations of HUD-FHA
requirements that included: failure to comply with reporting
requirements under the Home Mortgage Disclosure Act (HMDA); and failure
to maintain an adequate Quality Control Plan for the origination of
HUD-FHA insured mortgages.
3. Associate Trust Financial Services, Inc., Camp Springs, Maryland
Action: Withdrawal of HUD-FHA mortgagee approval.
Cause: Submission of false credit reports to HUD-FHA in connection
with the origination of HUD-FHA insured mortgages; and failure to
notify HUD-FHA of program violations.
4. Eastwood Mortgage Bankers, Ltd., Jericho, New York
Action: Withdrawal of HUD-FHA mortgagee approval and a proposed
civil money penalty of $75,000.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
requirements that included: using alleged fraudulent W-2 forms to
verify mortgagors' employment; failure to ensure that mortgagors met
their minimum required investment; failure to verify the source and/or
adequacy of mortgagors' funds to close; failing to conduct face-to-face
interviews with mortgagors; failing to conduct timely quality control
reviews; using ``strawbuyers'' to qualify for FHA insured mortgages;
closing loans that were not in accordance with the sales contract;
permitting improper third party loan originations by a mortgage broker
and paying ``kickbacks'' to such broker for referrals; submitting HUD-l
Settlement Statements that are not an accurate reflection of the
transaction; charging mortgagors unallowable fees; and using incomplete
gift letters.
5. Continental Capital Corp., Huntington Station, New York
Action: Proposed Settlement Agreement that would include
indemnification to the Department for any claim losses in connection
with 14 improperly originated HUD-FHA insured mortgages; corrective
action to assure compliance with HUD-FHA requirements; and payment to
the Department of a civil money penalty in the amount of $40,000.
Cause: A HUD monitoring review that cited violations of HUD-FHA
home mortgage insurance program requirements that included: use of
alleged falsified documentation or conflicting information to approve
HUD-FHA mortgagors; failure to properly verify the source and/or
adequacy of mortgagors' funds used for the downpayment and/or closing
costs; closing loans that exceeded HUD-FHA maximum mortgage amounts;
submitting loans for insurance endorsement that are in default; failure
to adequately verify mortgagor's income; failure to require necessary
flood insurance; charging incorrect fees to mortgagors; failure to
maintain a Quality Control Plan and perform timely quality control
reviews; failure to properly analyze and evaluate mortgagors' credit
history; and permitting mortgagors to sign documents in blank.
6. Consumer Home Mortgage, Inc., Melville, New York
Action: Proposed Settlement Agreement that would include:
indemnification to the Department for claim losses in connection with
27 improperly originated HUD-FHA insured mortgages; corrective action
to assure compliance with HUD-FHA requirements; and payment to the
Department of a civil money penalty in the amount of $75,000.
Cause: A HUD monitoring review that cited violations of HUD-FHA
home mortgage insurance program violations that included: using alleged
false information in originating HUD-FHA mortgage insurance; failure to
ensure that mortgagors met their minimum required investment; failure
to verify the source of funds for mortgagors' downpayment and/or
closing costs; permitting mortgagors to sign documents in blank; adding
non-occupant co-mortgagors to loans for the purpose of qualifying the
mortgagors.
7. Madison Home Equities, Inc., Lake Success, New York
Action: Proposed Settlement Agreement that would include:
indemnification to the Department for claim losses in connection with
31 improperly originated HUD-FHA insured mortgages; corrective action
to assure compliance with HUD-FHA requirements; and payment to the
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Department of a civil money penalty in the amount of $51,000.
Cause: A HUD monitoring review that cited violations of HUD-FHA
requirements that included: failure to properly verify and document the
source of mortgagors' funds used for downpayment and closing costs;
using unsubstantiated credit given to mortgagors in determining the
mortgagors' investment; using alleged false information to originate
HUD-FHA insured mortgages; submitting an alleged false property
inspection report; miscalculating a mortgagor's required investment;
failure to accurately reflect disbursements on HUD-l Settlement
Statements; and failure to establish, maintain, and implement a Quality
Control Plan in compliance with HUD-FHA requirements.
8. Mortgagees and Title I Lenders That Failed To Comply With HUD-FHA
Requirements for the Submission of an Audited Annual Financial
Statement and/or Payment of the Annual Recertification Fee
Action: Withdrawal of HUD-FHA mortgagee approval and Title I lender
approval.
Cause: Failure to submit to the Department the required annual
audited financial statement and/or remit the required annual
recertification fee.
Mortgagees Withdrawn
Salida Building and Loan Assn, Salida, CO; Lomas Mortgage New York
Inc, Dallas, TX; United Bank of Griffin FSB, Griffin, GA; First United
Savings Bank, FSB, Greencastle, IN; Macomb Savings and Loan Assn, Saint
Clair Shores, MI; D M Bullard Mortgage Bankers, Kalamazoo, MI;
Community Preservation Corp, New York, NY; Crusader Bank, Rosemont, PA;
Chester Valley Bancorp, Downingtown, PA; Heritage Federal Bank FSB,
Kingsport, TN; Lomas Financial Corporation, Dallas, TX; Lomas Mortgage
USA, Inc, Dallas, TX; Midamerica Bank Hudson, Hudson, WI; First
Washington Mortgage Corp, Herndon, VA; American Trust Mortgage Inc, San
Jose, CA; Humboldt Mortgage Company, Eureka, CA; Dothan Federal Savings
Bank, Dothan, AL; Unlimited Mortgage Services, Worthington, OH;
Franklin Bank NA, Southfield, MI; Northside Mortgage Company,
Chattanooga, TN; Farmers and Merchants Bank, Milford, NE; First
Republic Savings Bank FSB, Roanoke Rapids, NC; CPC Resources Inc, New
York, NY; First Fidelity Funding Corp, Fort Lauderdale, FL; Teico
Financial Services Inc, Manalapan, NJ; Richmond Mortgage Corporation,
Athens, GA; Glendale Federal Bank, Glendale, CA; Access Mortgage
Incorporated, Milpitas, CA; Diversified Residential Funding, Altamonte
Springs, FL; Delta Home Mortgage Incorporated, Sheridan, AR; First
American Lending, Coral Gables, FL.
Title I Lenders Withdrawn
Heritage Pullman Bk Trust Co, Chicago, IL; Devon Bank, Chicago, IL;
Laurel Federal Savings and Loan, Laurel, MS; Lehigh Savings Bank SLA,
Union, NJ; Lending Source, Folsom, CA; First Continental Mortgage Corp,
Jonesboro, AR; Orange Coast Mortgage Inc, Irvine, CA; S and S Financial
Inc, Woodland Hills, CA; Delta Acceptance Corp, Gonzales, LA.
Dated: May 1, 1997.
Nicolas P. Retinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 97-11810 Filed 5-6-97; 8:45 am]
BILLING CODE 4210-27-P
