[Federal Register Volume 59, Number 96 (Thursday, May 19, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-12207] [[Page Unknown]] [Federal Register: May 19, 1994] ----------------------------------------------------------------------- DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Office of the Assistant Secretary for Housing-Federal Housing Commissioner [Docket No. N-94-3772; FR-3712-N-01] Mortgagee Review Board Administrative Actions AGENCY: Office of the Assistant Secretary for Housing-Federal Housing Commissioner, HUD. ACTION: Notice ----------------------------------------------------------------------- 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) 708-1824. 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 January 1, 1994 through March 31, 1994. 1. Independence Mortgage Corporation of America, Inc., Winter Park, Florida Action: Proposed Settlement Agreement that includes indemnification to the Department for claim losses in connection with ten improperly originated loans. Cause: A HUD Office of Inspector General audit that cited the company for violations of HUD-FHA program requirements that included: (1) failure to conduct face-to-face interviews with mortgagors; (2) failure to verify downpayments; (3) miscalculation of the maximum insurable mortgage amount and required borrower investment; (4) failure to properly verify and analyze mortgagors' assets, liabilities and income; and (5) failure to ensure the accuracy of certifications made to HUD-FHA. 2. Interstate Plus Mortgage, Inc., San Diego, California Action: Settlement Agreement that includes the cancellation of HUD- FHA insurance on nine improperly originated loans under the Title I program, and corrective action to assure compliance with HUD-FHA requirements. Cause: A HUD monitoring review that disclosed violations of HUD-FHA Title I property improvement program requirements that included: (1) failure to report loan fraud by a former loan officer; (2) accepting brokered loan packages; (3) ``strawbuyers'' and fraudulent documentation used to originate loans; (4) funding loan packages after learning of the fraudulent practices by a former loan officer; (5) failure to properly disburse loan proceeds; (6) loan officer's acceptance of ``kickbacks'' from loan brokers; and (7) failure to obtain detailed descriptions of property improvement work to be performed by borrowers. 3. Middle Tennessee Mortgage, Inc., Dickson, Tennessee Action: Proposed Settlement Agreement that includes indemnification to the Department for claim losses in connection with eight improperly originated loans, payment of a civil money penalty in the amount of $500 for reporting violations under the Home Mortgage Disclosure Act (HMDA), and corrective action to assure compliance with HUD-FHA requirements. Cause: A HUD monitoring review that cited violations of HUD-FHA program requirements that included: (1) failure to collect and report Home Mortgage Disclosure Act (HMDA) data to HUD; (2) failure to comply with HUD-FHA Quality Control Plan requirements; (3) failure to verify the source and/or adequacy of the mortgagors' funds for downpayment or closing costs; (4) failure to obtain documentation to properly evaluate the borrowers' mortgage credit risk; (5) failure to properly calculate the borrowers' income; (6) failure to properly credit sweat equity; and (7) failure to resolve the borrower's derogatory credit. 4. Home Mortgage Company d/b/a Puerto Rico Home Mortgage, Hato Rey, Puerto Rico Action: Proposed Settlement Agreement that includes payment of a civil money penalty in the amount of $10,000, refunds to mortgagors for excessive and unallowable post endorsement fees, and continued implementation of corrective actions to assure compliance with HUD-FHA loan servicing requirements. Cause: A HUD monitoring review that disclosed violations of HUD-FHA loan servicing requirements that included: (1) untimely quality control reviews; (2) deducting late fees from mortgagor's escrow accounts prior to existing surpluses; (3) failure to perform management reviews prior to foreclosure; (4) excessive and unallowable post endorsement fees; (5) failure to perform timely property inspections; (6) failure to timely notify borrowers of the availability of counseling; and (7) failure to meet the reporting requirements of the Single Family Default Monitoring System. 5. State Funding, Inc., Corona, California Action: Proposed Settlement Agreement that includes indemnification to the Department for one improperly originated loan, corrective action to assure compliance with HUD-FHA requirements, and payment of a civil money penalty in the amount of $1,000 based upon violations of Home Mortgage Disclosure Act (HMDA) reporting requirements, and improper use of brokers in originating HUD-FHA insured mortgages. Cause: A HUD monitoring review that disclosed violations of HUD-FHA program requirements that included: (1) failure to report Home Mortgage Disclosure Act (HMDA) data to HUD; (2) use of mortgage brokers to assist in the preparation of FHA mortgage applications; (3) payment of ``kickbacks'' to mortgage brokers for referrals of loan applications; (4) submitting a delinquent loan for endorsement; and (5) failure to make timely refunds due mortgagors after loans had been paid in full. 6. Continental Capital Corporation, Huntington Station, New York 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). 7. All Kern Financial Corporation, Bakersfield, California 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). 8. Discount Financial Corporation, Longwood, 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 comply with HUD-FHA reporting requirements under the Home Mortgage Disclosure Act (HMDA). 9. First Guaranty Financial Corporation, Lake Elsinore, California Action: Proposed Settlement Agreement that includes indemnification to the Department for one improperly originated loan, and payment of a civil money penalty in the amount of $1,000. Cause: A HUD monitoring review that disclosed violations of HUD-FHA requirements that included: failure to verify a mortgagor's assets in the origination of one loan, failure to implement a Quality Control Plan, and failure to comply with Home Mortgage Disclosure Act (HMDA) Reporting Requirements. 10. Lane Mortgage Company, Inc., Lynwood, Colorado Action: Proposed Settlement Agreement that includes indemnification to the Department for one improperly originated loan, and payment of a civil money penalty in the amount of $500. Cause: A HUD monitoring review that disclosed violations of HUD-FHA requirements that included failure to comply with HUD-FHA reporting requirements under the Home Mortgage Disclosure Act (HMDA), and failure to properly establish a mortgagor's effective income in the origination of one loan. 11. Federated Mortgage Company, Inc., West Covina, 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 a Quality Control Plan, and failure to comply with the Home Mortgage Disclosure Act (HMDA) Reporting Requirements. 12. Mortgage Associates, Inc., Lakeland, Florida Action: Proposed Settlement Agreement that includes indemnification or a buydown of one overinsured mortgage in the event that additional documentation is not submitted, and payment of a civil money penalty in the amount of $1,000. Cause: A HUD monitoring review that disclosed violations of HUD-FHA requirements that included: (1) one overinsured mortgage; (2) failure to implement a Quality Control Plan; and (3) failure to comply with Home Mortgage Disclosure Act (HMDA) requirements. Dated: May 13, 1994 Nicolas P. Retsinas Assistant Secretary for Housing-Federal Housing Commissioner. [FR Doc. 94-12207 Filed 5-18-94; 8:45 am] BILLING CODE 4210-27-P