The U.S. Department of Housing and Urban Development’s mortgagee review board banned AmericaHomeKey Inc. from originating and underwriting new mortgages insured by the Federal Housing Administration.
The ban takes effect immediately. HUD also fined the Dallas-based lender $268,000 for what it called repeated and serious violations of FHA requirements.
“When we begin to see a pattern of failure to apply our standards, we will act to protect FHA’s financial health as well as consumers,” said Acting FHA Commissioner Carol Galante, in a statement. “We expect lenders to meet our requirements, not just to protect the safety of our insurance fund but to make certain they don’t set up borrowers to fail by putting them into mortgages they ultimately can’t sustain.”
HUD said AmericaHomeKey violated more than a dozen FHA standards. Among them, AmericaHomeKey failed to adequately document the source or adequacy of borrowers’ funds used for closing and failed to correctly calculate or adequately document borrowers’ income.
HUD said the lender also failed to comply with the agency’s property flipping requirements, including a case involving a property purchased for $14,100 that was resold approximately three months later for $125,000.
The lender also charged borrowers unallowable fees, the agency said.
Ginnie Mae also terminated AHK as an approved issuer, though AHK was not an active participant in the Ginnie Mae program.
America Home Key CEO Lane Terrell couldn’t immediately be reached for comment.