[Federal Register Volume 77, Number 175 (Monday, September 10, 2012)]
[Notices]
[Pages 55492-55495]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-22126]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5661-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)(5) of the National Housing
Act, this notice advises of the cause and description of administrative
actions taken by HUD's Mortgagee Review
[[Page 55493]]
Board against HUD-approved mortgagees.
FOR FURTHER INFORMATION CONTACT: Nancy A. Murray, Secretary to the
Mortgagee Review Board, 451 Seventh Street SW., Room B-133/3150,
Washington, DC, 20410-8000; telephone (202) 708-2224 (this is not a
toll-free number). Persons with hearing or speech impairments may
access this number through TTY by calling the toll-free Federal
Information Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION: Section 202(c)(5) of the National Housing
Act (12 U.S.C. 1708(c)(5)) 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 (``Board''). In
compliance with the requirements of Section 202(c) (5), this notice
advises of actions that have been taken by the Board from August 1,
2011 to December 31, 2011.
I. Settlement Agreements, Civil Money Penalties, Withdrawals of FHA
Approval, Suspensions, Probations, Reprimands, and Administrative
Payments
1. Euro Mortgage Bankers, Inc., Melville, NY [Docket No. 11-1120-MR]
Action: On November 30, 2011, the Board issued a Notice of
Administrative Action permanently withdrawing the FHA approval of Euro
Mortgage Bankers, Inc. (``EMB'').
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: EMB used falsified and/or
conflicting information in the origination of HUD/FHA loans; failed to
ensure loan applications were taken and processed by authorized
employees; failed to ensure that documents were not handled by an
interested third party; failed to adequately document the income used
to qualify the borrower; failed to document the source of funds used
for the downpayment and/or closing costs; failed to perform quality
control on all loans that went into default within the first six
months; and failed to timely submit audited financial statements and
supplementary reports to HUD.
2. Superior Mortgage Corporation, Hammonton, NJ [Docket No. 11-1177-MR]
Action: On October 11, 2011, the Board entered into a Settlement
Agreement with Superior Mortgage Corporation (``Superior'') that
required Superior to pay a civil money penalty in the amount of
$10,000, without admitting fault or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Superior failed to notify the
Department that it had paid a fine in the amount of $30,000 to the
Department of Banking of the Commonwealth of Pennsylvania; failed to
ensure that only principal owners or corporate officers submit the
annual certification report; and submitted a false certification to HUD
when it submitted its electronic annual certification for 2011.
3. Town Square Mortgage & Investments, Inc., Frisco, TX [Docket No. 11-
1194-MR]
Action: On September 20, 2011, the Board entered into a Settlement
Agreement with Town Square Mortgage & Investments, Inc. (``Town Square
Mortgage'') that required Town Square Mortgage to pay a civil money
penalty in the amount of $11,000, without admitting fault or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Town Square Mortgage submitted
false audited financial statements to HUD for Fiscal Year ending April
30, 2010, when it claimed ownership of a residential condominium unit
located in Apollo Beach, Florida; submitted audited financial
statements to HUD that were not in conformity with Generally Accepted
Accounting Principles due to the improper capitalization of a
residential condominium unit; and displayed the FHA/HUD logo on its Web
site when promoting its FHA mortgage services.
4. Wall Street Financial Corporation, Fairfield, NJ [Docket No. 11-
1179-MR]
Action: On November 8, 2011, the Board issued a Notice of
Administrative Action withdrawing the FHA approval of Wall Street
Financial Corporation (``WSFC'') for a period of one year.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: WSFC failed to timely submit or
complete its audited financial statements for its fiscal year ending
December 31, 2010; failed to pay its annual certification fee; and
failed to submit its annual certification for 2010.
5. Franklin American Mortgage Company, Franklin, TN [Docket No. 11-
1202-MR]
Action: On October 4, 2011, the Board entered into a Settlement
Agreement with Franklin American Mortgage Company (``FAMC'') that
required FAMC to pay a civil money penalty in the amount of $14,500,
without admitting fault or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: FAMC failed to notify HUD that
it paid a fine in the amount of $6,750 to the Department of Banking of
the Commonwealth of Pennsylvania to resolve allegations that FAMC had
violated the Mortgage Licensing Act, and submitted a false
certification to HUD when it submitted it electronic annual
certification for 2011.
6. Midland Mortgage Co., Oklahoma City, OK [Docket No. 10-1999-MR]
Action: On November 23, 2011, the Board entered into a Settlement
Agreement with Midland Mortgage Company (``MMC'') that required MMC,
without admitting fault or liability, to pay a civil money penalty in
the amount of $1,300,000 and to pay all outstanding mortgage insurance
premiums owed to HUD.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: MMC failed to remit mortgage
insurance premiums to HUD/FHA on 3,438 loans, and failed to notify HUD/
FHA within fifteen (15) days of the termination of 2,488 contracts for
mortgage insurance.
7. UnionFederal Mortgage Corporation, Nanuet, NY [Docket No. 11-1205-
MR]
Action: On November 30, 2011, the Board issued a Notice of
Administrative Action withdrawing the FHA approval of UnionFederal
Mortgage Corporation (``UFMC'') for a period of one year.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: UFMC failed to notify HUD that
it voluntarily surrendered its license to the New York State Banking
Department on or about October 20, 2010.
8. Vanguard Funding, LLC, Garden City, NY [Docket No. 11-1102-MR]
Action: On November 28, 2011, the Board entered into a Settlement
Agreement with Vanguard Funding, LLC (``VF'') that required VF, without
admitting fault or liability, to pay a civil money penalty in the
amount of $101,500, to indemnify HUD against losses relating to five
(5) FHA-insured loans for a period of five (5) years from the date of
the Settlement Agreement, and to require third party training for its
underwriters.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by
[[Page 55494]]
HUD: VF failed to notify HUD within ten (10) business days that it was
the subject of two state enforcement actions prohibiting it from
originating mortgages; VF originated six (6) FHA-insured mortgages in
the state of New York while it was the subject of an order from the
state of New York suspending its mortgage banker license; VF permitted
a non-FHA approved mortgage broker to perform loan origination services
on two (2) FHA-insured loans; VF approved three (3) loans for borrowers
who were ineligible for federally insured mortgages due to outstanding
delinquent federal debt; VF approved two (2) FHA-insured loans without
adequately documenting the income used to qualify the borrowers; VF
approved three (3) FHA-insured loans without resolving discrepancies in
the loan files relating to the borrowers' income and employment; VF
failed to document the source of gift funds on three (3) FHA-insured
loans; VF approved a loan when the borrower did not meet the minimum
credit requirements; VF approved one loan where it omitted a liability
of the borrower in the underwriting analysis; VF accepted three (3)
loan applications from loan correspondents for which VF was not an FHA
approved Sponsor; and VF failed to review five (5) FHA-insured loans
that went into early payment default within the first six (6) months of
repayment.
9. Wells Fargo Bank, N.A., Minneapolis, MN [Docket No. 11-1183-MR]
Action: On December 20, 2011, the Board issued a letter of
reprimand to Wells Fargo Bank, N.A. (``Wells Fargo'').
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Wells Fargo failed to comply
with property preservation and protection requirements on two (2) HUD-
insured homes following foreclosure.
10. MetLife Bank, N.A., Bridgewater, NJ [Docket No. 11-1148-MR]
Action: On December 12, 2011, the Board entered into a Settlement
Agreement with MetLife Bank, N.A. (``MetLife'') that required MetLife,
without admitting fault or liability, to pay an administrative payment
in the amount of $41,250 and waive all insurance benefits or indemnify
HUD against any losses relating to eleven (11) FHA-insured mortgages
for a period of five (5) years from the date of the Settlement
Agreement.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements self-reported by MetLife: MetLife violated HUD/
FHA requirements when it approved eleven (11) FHA-insured loans without
identifying irregularities and resolving discrepancies and conflicting
information in the loan files; MetLife violated HUD/FHA requirements on
six (6) FHA-insured loans when it failed to adequately document the
borrowers' income; MetLife violated HUD/FHA requirements when it
approved four (4) FHA-insured loans after failing to ensure that
documents were not handled by an interested third party; MetLife
violated HUD/FHA requirements on four (4) FHA-insured transactions when
it failed to document the source of funds used for the borrowers' down-
payments and/or closing costs; MetLife violated HUD/FHA requirements
when it approved three (3) FHA-insured loans and omitted monthly debt
obligations from its underwriting analysis; MetLife violated HUD/FHA
requirements when it approved an FHA-insured loan for a borrower who
was ineligible because of an outstanding court-ordered judgment;
MetLife violated HUD/FHA requirements when it approved a loan for FHA
mortgage insurance without ensuring the borrower met the statutory 3.5%
minimum investment requirement; and MetLife violated HUD/FHA
requirements when it approved a loan for a borrower that was over-
insured by $3,598.54, because it had failed to consider the seller's
inducement to purchase.
11. Reliance First Capital, LLC Melville, NY [Docket No. 11-1203-MR]
Action: On December 22, 2011, the Board entered into a Settlement
Agreement with Reliance First Capital, LLC (``Reliance'') that required
Reliance to pay a civil money penalty in the amount of $11,000, without
admitting fault or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Reliance failed to notify HUD
that it agreed to pay a fine in the amount of $5,000 to the Department
of Banking of the Commonwealth of Pennsylvania, and submitted a false
certification to HUD when it submitted its electronic annual
certification for 2011.
12. Virginia Commonwealth Bank, Petersburg, VA [Docket No. 11-1273-MR]
Action: On December 8, 2011, the Board entered into a Settlement
Agreement with Virginia Commonwealth Bank (``VCB'') that required VCB,
without admitting fault or liability, to pay a civil money penalty in
the amount of $6,725 and to remit all outstanding mortgage insurance
premiums and late fees owed to HUD.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: VCB failed to timely remit
mortgage insurance premiums on forty-four (44) loans.
13. E Mortgage Management, LLC, Haddon Township, NJ [Docket No. 11-
1200-MR]
Action: On February 3, 2012, the Board entered into a Settlement
Agreement with E Mortgage Management, LLC (``EMM'') that required EMM
to pay a civil money penalty in the amount of $14,500, without
admitting fault or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: EMM failed to notify HUD that
EMM agreed to pay a fine in the amount of $61,500 to the Department of
Banking of the Commonwealth of Pennsylvania, and submitted a false
certification to HUD when it submitted its electronic Annual
Certifications for 2011.
14. Master Mortgage Corporation, Bayamon, PR [Docket No. 11-1147-MR]
Action: On February 3, 2012, the Board issued a Notice of
Administrative Action withdrawing the FHA approval of Master Mortgage
Corporation (``MMC'') for five years.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: MMC failed to timely submit
audited financial statements and supplementary reports to HUD, and
failed to notify HUD that MMC and MMC's President were issued a
Complaint and Cease and Desist Order from the Commissioner of Financial
Institutions of Puerto Rico that required MMC to pay fines totaling
$280,000, ordered MMC to permanently cease and desist from operating
and engaging in the business of a mortgage institution in Puerto Rico,
required MMC to immediately surrender its mortgage institution's
license, and barred MMC's president from serving as an officer,
director, or owner of any financial institution.
15. Clarion Mortgage Capital, Inc., Greenwood Village, CO [Docket No.
10-1798-MR]
Action: On February 23, 2011, the Board entered into a Settlement
Agreement with Clarion Mortgage Capital, Inc. (``Clarion'') that
required Clarion to pay a civil money penalty in the amount of $45,000,
without admitting fault or liability.
[[Page 55495]]
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Clarion failed to comply with
HUD's quality control requirements; violated HUD's mortgagee employee
and staffing requirements; and charged unallowable and unsupported
fees.
16. PHH Home Loans, LLC, Mount Laurel, NJ [Docket No. 11-1201-MR]
Action: On February 15, 2012, the Board entered into a Settlement
Agreement with PHH Home Loans, LLC (``PHH'') that required PHH to pay a
civil money penalty in the amount of $14,500, without admitting fault
or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: PHH failed to notify HUD that
PHH agreed to pay a fine of $11,750 to the Department of Banking of the
Commonwealth of Pennsylvania; failed to notify HUD that it paid a fine
of $50,000 to the Illinois Department of Financial and Professional
Regulation; and submitted a false certification to HUD when it
submitted its electronic annual certification for 2011.
17. HomeState Mortgage Company, LLC, Anchorage, AK [Docket No. 11-1286-
MR]
Action: On April 3, 2012, the Board entered into a Settlement
Agreement with HomeState Mortgage Company, LLC (``HMC'') that required
HMC, without admitting fault or liability, to pay a civil money penalty
in the amount of $15,000 and to complete a six-month period of
probation, during which time HMC must submit all marketing materials to
HUD on a quarterly basis for review and approval.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: HMC reproduced the official HUD
seal on an advertisement or business solicitation, and disseminated a
misrepresentative or misleading advertisement or business solicitation
to the public.
18. United Northern Mortgage Bankers, LTD, Levittown, NY [Docket No.
11-1149-MR]
Action: On March 16, 2012, the Board entered into a Settlement
Agreement with United Northern Mortgage Bankers LTD (``UNMB'') that
required UNMB, without admitting fault or liability, to pay a civil
money penalty in the amount of $25,000, indemnify HUD against losses
relating to two FHA-insured loans for a period of five years, and
complete a six-month period of probation during which time UNMB must
submit the results of its monthly QC audits and certifications as to
its QC staffing and operations.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: UNMB failed to ensure that the
quality control reviews for early payment defaults were completed; used
conflicting information in originating and obtaining HUD/FHA mortgage
insurance; and failed to adequately document the stability of income
used to qualify the borrowers.
19. Fifth Third Bank, Cincinnati, OH [Docket No. 10-1998-MR]
Action: On April 27, 2012, the Board entered into a Settlement
Agreement with Fifth Third Bank (``Fifth Third'') that required Fifth
Third to pay a civil money penalty in the amount of $700,000, without
admitting fault or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Fifth Third failed to timely
remit mortgage insurance premiums to HUD/FHA, and failed to notify HUD/
FHA within 15 calendar days of the termination, transfer or sale of
mortgage insurance contracts.
II. Lenders That Failed To Timely Meet Requirements for Annual
Recertification of HUD/FHA Approval
Action: The Board entered into settlement agreements with the
lenders listed below, which required the lender to pay a $7,500 or
$3,500 civil money penalty, without admitting fault or liability.
Cause: The Board took this action based upon allegations that the
lenders listed below failed to comply with the Department's annual
recertification requirements in a timely manner.
1. Anchor Funding Corporation, Norcross, GA ($7,500.00) [Docket No.
11-1225-MRT]
2. Freyre Mortgage Corp., San Juan, PR. ($3,500.00) [Docket No. 11-
1229-MRT]
III. Lenders That Failed To Meet Requirements for Annual
Recertification of HUD/FHA Approval
Action: The Board voted to withdraw the FHA approval of each of the
lenders listed below for a period of one year.
Cause: The Board took this action based upon allegations that the
lenders listed below were not in compliance with the Department's
annual recertification requirements.
1. First Home Mortgage, Inc., Jonesboro, AR [Docket No. 12-1642-
MRT].
2. HCL Finance Inc., San Jose, CA [Docket No. 12-1641-MRT].
3. Ikon Mortgage Lenders, Inc., Fort Lauderdale, FL [Docket No. 09-
9910-MRT].
4. Delta Home and Lending, Inc., Sacramento, CA [Docket No.12-1643-
MRT].
5. Axiom Mortgage Bankers Corporation, Irvine, CA [Docket No. 11-
1234-MRT].
6. Red Rock Mortgage & Lending, LLC., Oklahoma City, OK [Docket No.
11-1233-MRT].
Dated: August 31, 2012.
Carol J. Galante,
Acting Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 2012-22126 Filed 9-7-12; 8:45 am]
BILLING CODE 4210-67-P