[Federal Register Volume 60, Number 24 (Monday, February 6, 1995)]
[Notices]
[Pages 7063-7065]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2772]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Assistant Secretary for Housing-Federal Housing
Commissioner
[Docket No. N-95-3878; FR-3861-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) 708-1515. The
Telecommunication 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 July 1, 1994 through December 31, 1994.
1. Barton Funding Company, Inc.; Long Beach, CA
Action: Withdrawal of HUD-FHA mortgagee approval and proposed civil
money penalty in the amount of $100,000.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
requirements that included: failure to remit to HUD-FHA over 100 One-
Time Mortgage Insurance Premiums (OTMIPs) collected from mortgagors and
totalling over $223,000; failure to timely submit 129 loans for HUD-FHA
mortgage insurance endorsement; failure to maintain an adequate Quality
Control Plan; failure to comply with HUD-FHA reporting requirements
under the Home Mortgage Disclosure Act (HMDA); and failure to maintain
copies of HUD-1 Settlement Statements. [[Page 7064]]
2. Mortgage Systems, Inc., Las Vegas, NV
Action: Proposed Settlement Agreement to be concluded within 60
days that includes payment of a civil money penalty in the amount of
$15,000; indemnification to the Department for any claim losses on
eight improperly originated loans; corrective action to assure
compliance with HUD-FHA requirements; and transfer of the company to
new ownership: if a Settlement Agreement is not concluded within the
60-day period, the HUD-FHA mortgagee approval shall be withdrawn and a
civil money penalty in the amount of $75,000 proposed.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
requirements that included: failure to comply with conditions of
probation previously imposed by the Board; failure to implement an
adequate Quality Control Plan; failure to timely remit OTMIPs; failure
to submit closed loans for endorsement within 60 days after loan
closing; failure to meet annual recertification requirements regarding
amount of liquid assets; submission of alleged false information;
failure to document the borrower's source of funds for downpayment and
closing costs; failure to correctly calculate the borrower's income for
loan approval; failure to ensure that the borrower made the minimum
required investment; use of mortgage brokers to originate loans and
payment of ``kickbacks'' to such brokers; non-compliance with HUD's
conflict-of-interest prohibited payments provisions; failure to conduct
face-to-face interviews; and allowing loan correspondents to close
loans improperly.
3. G&R Financial Group, Plantation, FL
Action: Withdrawal of HUD-FHA approval.
Cause: Failure by the president of the company to comply with the
terms and conditions of a Settlement Agreement with the Department,
including reimbursement for claim losses of $181,521 incurred in
connection with improperly originated HUD-FHA insured mortgages.
4. Hallmark Government Mortgage, Inc., Bellevue, WA
Action: Settlement Agreement that includes corrective action to
assure compliance with HUD-FHA requirements.
Cause: HUD monitoring review that disclosed failure to maintain an
adequate Quality Control Plan for the origination of HUD-FHA insured
mortgages, and noncompliance with the Department's reporting
requirements under the Home Mortgage Disclosure Act (HMDA).
5. Washington Capital Associates, Inc., Arlington, VA
Action: Review by Mortgagee Review Board with conclusion that no
administrative action is warranted.
Cause: A HUD Office of Inspector General Audit Report citing
underwriting deficiencies, and noncompliance with the Department's
requirements concerning the review of insured multifamily project
financial statements and monitoring of capital expenditures.
6. Neighborhood Acceptance Corporation, Costa Mesa, CA
Action: Probation and proposed civil money penalty in the amount of
$5,000.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
Title I property improvement program requirements that included:
establishing a minimum loan amount; permitting loan brokers to
participate in the origination of Title I loans; originating Title I
loans in locations where the company was not approved by HUD-FHA to do
Title I business; and approving a loan after improvements had been
started.
7. Utah Mortgage Loan Corporation, Salt Lake City, UT
Action: Proposed Settlement Agreement which includes the payment of
a civil money penalty in the amount of $3,000, indemnification to the
Department for any claim loss on one improperly originated loan, 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 the Department's
reporting requirements under the Home Mortgage Disclosure Act (HMDA);
failure to maintain an adequate Quality Control Plan; failure to
maintain a fidelity bond and errors and omissions coverage; and
improperly originating a HUD-FHA insured mortgage.
8. Home Owners Funding Corporation of America, Dallas, TX
Action: Proposed Settlement Agreement that includes: payment of a
civil money penalty in the amount of $l0,000; indemnification to the
Department for any claim losses in connection with l4 improperly
originated Title I loans; and corrective action to assure compliance
with HUD-FHA requirements.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
Title I manufactured home loan program requirements which included:
failure to report dealers to HUD-FHA for misstatements of facts on
placement certificates; funding loans knowing that placement
certificates contained false certifications; failure to determine
borrowers' source of funds for downpayment; funding loans prior to
dealer approval; failure to comply with dealer approval requirements;
failure to comply with requirements for reporting loans for insurance;
and failure to comply with the Department's reporting requirements
under the Home Mortgage Disclosure Act (HMDA).
9. Seacoast Equities, Inc., La Mesa, CA
Action: Settlement Agreement that includes the payment of a civil
money penalty in the amount of $l,000 and corrective action to assure
compliance with HUD-FHA Title I program requirements.
Cause: A HUD monitoring review which disclosed violations of HUD-
FHA requirements that included: failure to comply with the Department's
reporting requirements under the Home Mortgage Disclosure Act (HMDA);
using misleading advertisements regarding the Title I program; and
requiring a minimum loan amount.
10. Kiddco Mortgage Company, Cincinnati, OH
Action: Letter of Reprimand and proposed civil money penalty in the
amount of $1,000.
Cause: A HUD monitoring review that cited the company for bringing
a defaulted loan current in order to process a streamline refinance,
and making alleged false certifications to HUD-FHA.
11. Greater Chicago Mortgage Corporation, Chicago, IL
Action: Letter of Reprimand
Cause: Alteration of loan documents by a former employee of the
company in connection with a HUD-FHA insured mortgage transaction and
violation of HUD-FHA prepurchase counseling requirements with respect
to the borrowers involved in the transaction.
12. T.A.B. Mortgage Corporation, Fort Lauderdale, FL
Action: Probation and proposed civil money penalty in the amount of
$10,000.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
requirements which included: failure to comply with HUD-FHA reporting
requirements under the Home Mortgage [[Page 7065]] Disclosure Act
(HMDA); charging a variation in mortgage interest rates that exceed two
percent for FHA-insured mortgages based on mortgage amounts; failure to
implement an adequate Quality Control Plan; requesting FHA case numbers
using the mortgagee number of a lender that was not approved as a
sponsor for the company; failure to provide information requested by
HUD that was required to complete a review of the company's origination
procedures; alleged submission of false information to HUD for loan
approval and permitting the hand carrying of a Verification of
Employment; and failure to respond to a findings letter issued by the
Monitoring Division based upon a previous monitoring review.
13. J. I. Kislak Mortgage Corporation, Miami Lakes, FL
Action: Letter of Reprimand and proposed civil money penalty in the
amount of $5,000.
Cause: Violation of HUD-FHA requirements by requiring as a
condition of purchasing HUD-FHA insured mortgages from certain
correspondent lenders, that the mortgages exceed a minimum loan amount.
14. Commercial Center Bank, Santa Ana, CA
Action: Settlement Agreement that includes indemnification to the
Department for any claim losses in connection with improperly
originated mortgages, corrective action to assure compliance with HUD-
FHA requirements; and payment of a civil money penalty in the amount of
$12,000.
Cause: A HUD monitoring review that disclosed violations of HUD-FHA
requirements that included: making improper payments on defaulted loans
to bring them current in order to submit them for HUD-FHA mortgage
insurance; and submitting loans for insurance endorsement when payments
had not been made within the month due.
15. Deposit Guaranty Mortgage Company, Jackson, MS
Action: Probation and proposed civil money penalty in the amount of
$5,000.
Cause: A HUD monitoring review that cited violations of HUD-FHA
requirements including: failure to timely remit One-Time Mortgage
Insurance Premiums; failure to implement an adequate Quality Control
Plan; failure to conduct a face-to-face interview with the borrower;
and failure to maintain complete loan origination files.
16. Mortgagees not in Compliance With HUD-FHA Reporting Requirements
Under The Home Mortgage Disclosure Act (HMDA)
Action: Letter of Reprimand and proposed civil money penalty in the
amount of $1,000.
Cause: Failure to submit HMDA data to the Department. McKinney-
Green, Inc., Gainesville, FL; First Security Mortgage & Investment
Company, Inc., Pensacola, FL; Rocky Mountain Mortgage Ltd.,
Albuquerque, NM; Wellington Mortgage Corp., Beaver, PA; Mountain States
Mortgage Center, Sandy, UT; Miracle Mortgage Service, Inc., Carson, CA;
First Mortgage Services, Inc., Fargo, ND; Traditional Bankers Mortgage
Corp., Ponce, PR; Peninsula Mortgage Bankers Corp., Coral Gables, FL;
Fidelity Union Mortgage Corp., Christiansted, VI; Amerifirst Financial,
Inc., Mesa, AZ.
Action: Letters of Reprimand and proposed civil money penalty of
$2,000, which shall be reduced to $1,000 upon submission to the
Department of HMDA data for 1993 by January 1, 1995.
Cause: Failure to submit HMDA data to the Department. Freyre
Mortgage Corp., Santurce, PR; Alameda Mortgage Corp., Castro Valley,
CA; Golden State Mortgage Corp., San Jose, CA.
Dated: January 26, 1995.
Jeanne K. Engel,
General Deputy Assistant Secretary Housing--Federal Housing
Commissioner.
[FR Doc. 95-2772 Filed 2-3-95; 8:45 am]
BILLING CODE 4210-27-P