[Federal Register Volume 59, Number 154 (Thursday, August 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19633]
[[Page Unknown]]
[Federal Register: August 11, 1994]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing-Federal Housing
Commissioner
[Docket No. N-94-3804; FR-3758-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,
S.W., Washington, D.C. 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 April 1, 1994 through June 30, 1994.
l. Georgia Bankers Bank, Atlanta, Georgia
Action: Settlement Agreement that includes payment to the
Department the amount of $252,000 and compliance with HUD-FHA loan
origination requirements.
Cause: Failure to properly underwrite 17 single family mortgages in
accordance with HUD-FHA requirements. The violations of the
Department's requirements included: failure to properly underwrite
large investor loans; failure to obtain borrower's tax returns and
year-to-date profit and loss statements; failure to adequately
establish borrower's income; failure to use diligence and prudent
lending practices in verifying borrower documentation to support
income; and failure to adequately establish borrower's Social Security
Number.
2. Kadilac Mortgage Bankers, Ltd., Great Neck, New York
Action: Settlement Agreement that includes payment to the
Department the amount of $300,000, compliance with HUD-FHA
requirements, and a review of the company's HUD-FHA loan origination
procedures within 120 days of the date of the Agreement.
Cause: A HUD-FHA monitoring review that cited violations of HUD-FHA
single family program requirements that included: failure to conduct a
face-to-face interview with prospective borrowers; use of inaccurate
documentation to approve mortgagors; failure to resolve conflicting
documentation; failure to secure required documentation for a HUD-FHA
loan; closing loans that exceeded HUD-FHA maximum mortgage amounts;
failure to reflect all charges to the buyers and sellers on the HUD--1
Settlement Statement; failure to properly verify the source and/or
adequacy of the funds to close and the mortgagor's credit history;
failure to include recurring obligations when underwriting a loan;
exceeding HUD-FHA guidelines without documenting significant
compensating factors; and failure to document the commitment fees
charged to mortgagors.
3. Keyrose Mortgage Company, Glendale, California
Action: Proposed Settlement Agreement that includes 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 of HUD-FHA
program requirements that included: improper use of mortgage brokers to
originate HUD-FHA insured mortgages; improper payments to mortgage
brokers; failure to implement a Quality Control Plan for the
origination of HUD-FHA insured mortgages; failure to meet the principal
activity requirement of a HUD-FHA approved loan correspondent; failure
to conduct face-to-face interviews with borrowers; and failure to
maintain complete loan files.
4. Centennial Mortgage, Inc., South Bend, Indiana
Action: Letter of Reprimand and proposed civil money penalty in the
amount of $5,000.
Cause: A false statement made to the Department in connection with
an application for HUD-FHA mortgage insurance for a multifamily
mortgage. The company certified that certain funds of the mortgagor
entity were on deposit in a bank account prior to the time the account
was established.
5. New England Funding Group, Inc., Marblehead, Massachusetts
Action: Withdrawal of HUD-FHA mortgagee approval.
Cause: Misrepresentation by the company that it was an approved
Government National Mortgage Association (GNMA) seller/servicer.
6. Lambrecht Company, Southfield, Michigan
Action: Withdrawal of HUD-FHA mortgagee approval.
Cause: Failure to meet HUD-FHA mortgagee approval requirements due
to cessation of operations.
7. Wells Federal Bank, Wells, Minnesota
Action: Proposed Settlement Agreement that provides for
reimbursement to the Department for the overpayment of a claim in
connection with a Title I property improvement loan.
Cause: Improper submission of an insurance claim to the Department
in connection with a Title I property improvement loan.
8. Approved Mortgage Corporation, Homestead, 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 implement a Quality Control Plan for loan origination in accordance
with HUD-FHA requirements.
9. Pacific Northwest Mortgage, Renton, Washington
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).
10. Centerbank Mortgage Company, Waterbury, Connecticut
Action: Settlement Agreement that includes payment to the
Department in the amount of $5,000 and compliance with HUD-FHA loan
servicing requirements.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
loan servicing requirements that included: failure to implement an
adequate Quality Control Plan; failure to properly recertify Section
235 mortgages; and failure to provide detailed explanations in notices
sent to mortgagors advising them of rejection for the assignment
program.
11. Canyon Springs Financial d/b/a American Builders Mortgage Santa
Ana, 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 an acceptable Quality Control Plan, and failure to comply
with HUD-FHA reporting requirements under the Home Mortgage Disclosure
Act (HMDA).
12. Meridian Mortgage Financial Corporation, Aurora, Colorado
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 an acceptable Quality Control Plan, and failure to comply
with HUD-FHA reporting requirements under the Home Mortgage Disclosure
Act (HMDA).
Dated: August 4, 1994.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 94-19633 Filed 8-10-94; 8:45 am]
BILLING CODE 4210-27-P
