[Federal Register Volume 62, Number 166 (Wednesday, August 27, 1997)]
[Notices]
[Pages 45432-45434]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22722]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4209-N-03]
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 1-800-877-8339 (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 April 12, 1997 through July 17, 1997.
1. First Choice Mortgage LLC, Burr Ridge, Illinois
Action: Withdrawal of HUD-FHA mortgagee approval and a proposed
civil money penalty of $200,000.
[[Page 45433]]
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
requirements that included: failure to remit to HUD-FHA One-Time
Mortgage Insurance Premiums (OTMIPs) within 15 days after loan closing,
and, to timely remit late charges and interest; and failure to
implement a Quality Control Plan.
2. InterAmerican Mortgage Corp., Rosedale, New York
Action: Withdrawal of HUD-FHA mortgagee approval and a proposed
civil money penalty of $100,000.
Cause: A HUD monitoring review that cited violations of HUD-FHA
requirements that included: use of alleged false documentation or
conflicting information to approve mortgagors; failure to report
fraudulent activity to HUD-FHA; closing loans that exceeded HUD-FHA
maximum mortgage amounts; closing an unauthorized loan to an investor;
failure to properly verify the source and/or adequacy of mortgagors'
funds for the downpayment and/or funds to close; employing a loan
officer that was not an exclusive employee; failure to maintain a
Quality Control Plan in compliance with HUD-FHA requirements; failure
to reflect all charges to the buyers and sellers on the HUD-l
Settlement Statements; charging borrowers fees that are not in
compliance with HUD-FHA requirements; and loan pricing based on loan
amounts.
3. AFI Mortgage Corporation, Shawnee, Kansas
Action: Withdrawal of HUD-FHA mortgagee approval.
Cause: Violations of the Department's requirements that included:
failure to remit payments to Government National Mortgage Association
(GNMA) securities' holders in connection with liquidated mortgages in
GNMA mortgage-backed securities pools; and failure to meet HUD-FHA net
worth requirements for approval as a mortgagee.
4. LIDD Enterprises, Inc., d/b/a Southern California Funding,
Pasadena, California
Action: Withdrawal of HUD-FHA Title I lender approval.
Cause: Use of false and misleading advertising in the Title I
Property Improvement Home Loan Program.
5. Carlton Mortgage Services, Inc., Palatine, Illinois
Action: Proposed Settlement Agreement that would include: payment
to the Department of a civil money penalty in the amount of $15,000;
indemnification for any claim losses in connection with three
improperly originated HUD-FHA insured mortgages; a refund of the
mortgage insurance premium to a borrower in connection with an
uninsured loan; and corrective action to assure compliance with HUD-FHA
requirements.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
requirements that included: failure to timely remit One-Time Mortgage
Insurance Premiums (OTMIPs); failure to properly calculate mortgagors'
income and/or debt ratios; permitting ``sweat equity'' to be escrowed;
and failure to implement an adequate Quality Control Plan.
6. Mortgage Capital Resource Corporation, Santa Ana, California
Action: Proposed Settlement Agreement that would include: a payment
to the Department in the amount of $35,000; indemnification for any
claim loss in connection with one HUD-FHA insured mortgage; and
corrective action to assure compliance with HUD-FHA requirements.
Cause: Violations of the Department's requirements that included:
failure to perform quality control reviews of branch offices; failure
to perform timely quality control reviews; and failure to disclose in
the company's annual audited financial statement that the Department
was considering administrative action against the company.
7. Consumer Home Mortgage, Inc., Melville, New York
Action: Settlement Agreement that includes: 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 insured mortgages; 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; and,
adding non-occupant co-mortgagors to loans for the purpose of
qualifying the mortgagors.
8. Madison Home Equities, Inc., Lake Success, New York
Action: Settlement Agreement that includes: 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 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.
9. 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: Associated Funding Services, Inc., Hickory
Hills, IL; first Mecklenburg Mortgage Corp., Charlotte, NC; Tower
Mortgage Corp., Austin, TX; Home Loans of America, Downey, CA; National
Guaranty Mortgage Corp., Atlanta, GA; Chase Federal Bank FSB, Miami,
FL; Citizens Mortgage Corp., Atlanta, GA; American Financial Mortgage,
Decatur, GA; First Federal Savings Bank, Leitchfield, KY; First Liberty
Bank, Macon, GA; Weymouth Savings Bank, Weymouth, MA; Bankunited, Coral
Gables, FL; Home Owners Funding Corp. of America, Dallas, TX; Mortgages
Unlimited Inc., Fair Oaks, CA; Community Mortgage Investment,
Blythewood, SC; Great Five Percent Real Estate Company, Covina, CA;
Puget Sound Mortgage Escrow Inc., Poulsbo, WA; First Intercity
Mortgage, Campbell, CA; Hartford Bancorp, Lancaster, CA;
[[Page 45434]]
Wogo, Inc., Palmdale, CA; Citi Lites Realty Inc., Rancho Cucamonga, CA;
Peninsula Bank of San Diego, San Diego, CA; First American Savings
Bank, Bedford, TX; Smith Solomon, Temple City, CA. Title I lenders
withdrawn: Home Loans of America, Downey, CA; Kinsley Bank, Kinsley,
KS; First Mecklenburg Mortgage Company, Charlotte, NC; Coop Ahorry
Credito Maunabo, Maunabo, PR; SD Mortgage Associates, Inc., San Diego,
CA; All American Funding Inc., Santa Monica, CA; Conduit Acceptance
Corp., Dallas, TX; Homeland Savings Bank, Waterloo, IA; Antelope
Financial Inc., Lancaster, CA; Eggie Mortgage Inc., d/b/a Rockland
Financial, Sherman Oaks, CA; Great Five Percent Real Estate Company,
Covina, CA; Wogo Inc d/b/a Regency Financial, Palmdale, CA; Platinum
USA Home Loan Inc., Las Vegas, NV; Community Mortgage Investment,
Blythewood, SC; New York Central Mortgage Inc., Tarzana, CA; Mortgage
America Nationwide, Grand Terrace, CA.
Dated: August 21, 1997.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing, Commissioner.
[FR Doc. 97-22722 Filed 8-26-97; 8:45 am]
BILLING CODE 4210-27-P
