The Federal Housing Administration’s Mortgagee Review Board (MRB) took administrative actions against 26 different lenders for a range of offenses.
“It’s never been more important that lenders doing business with FHA apply our standards to each and every loan they originate and underwrite,” said Acting FHA Commissioner Carol Galante. “FHA requirements ensure homeowners are put on a path of sustainable homeownership and that ultimately helps stabilize entire neighborhoods and communities.”
Three of the actions were related to lender actions having to do with the Federal Housing Administration’s Home Equity Conversion Mortgage (HECM).
The MRB withdrew the Federal Housing Administration approval of 1st Continental Mortgage, Inc. for allegedly failing to maintain and implement a quality control plan as well as follow HUD’s HECM program requirements.
Catalyst Lending entered into a settlement agreement with the MRB, where the company agreed to pay a civil penalty in the amount of $50,000 without admitting fault or liability. Catalyst allegedly violated HUD/FHA requirements for a clear and effective separation of two mortgage companies; submitted false certifications to HUD in connection with transactions in which Catalyst allowed non-employees to originate FHA loan; and processed a HECM loan prior to the borrower’s receipt of counseling.
Illinois based Hartland Mortgage Centers, Inc. also entered into a settlement agreement with the MRB and agreed to pay $7,500 without admitting fault or liability. Hartland allegedly distributed an advertisement that misrepresented HUD/FHA’s HECM program requirements in a mailer envelope that simulated a government form.
The MRB also withdrew the FHA approval of 123 lenders for failure to comply with HUD’s annual recertification requirements.
Since 2009, the MRB took more than 2,300 administrative actions against lenders, including a record 1,600 in 2010 said the agency.
View the notice here.
