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August 24, 2001
© Copyright 2001, IRED.com, Inc.
HUD Imposes Sanctions on 55 Lenders
"These administrative actions show that HUD is serious about protecting the American homebuyer...Lenders who think about breaking the rules should take notice and understand that the consequences can be severe." U.S. Housing and Urban Development Assistant Secretary for Housing/Federal Housing Commissioner John C. Weicher
U.S. Housing and Urban Development (HUD) Mortgagee Review Board has notified 55 lenders in 22 states of their violations of federal lending regulations and has imposed sanctions on them including withdrawal of their Federal Housing Administration (FHA) lending authority, indemnifications of loans, and payments of almost $3 million in fines.
HUD's four Home Ownership Centers - in Atlanta, Denver, Philadelphia and Santa Ana, CA - conducted a majority of the reviews and referred the violaters to the Mortgagee Review Board, which was established to protect the FHA insurance fund.
The Mortgagee Review Board, which consists of the Federal Housing Commissioner and six senior HUD officials, fined Mortgage Lending of America, Inc., of Huntington Station, NY, with $533,500 in civil penalties and a five-year withdrawal of authority to originate FHA-insured loans.
Other penalties of fines and withdrawals were as follows:
- Capitol Mortgage Bankers, Inc., Millersville, MD ($280,500/5 years)
- American Skycorp, Inc., Timonium, MD ($220,000/5 years)
- Assurety Mortgage Group, Inc., Decatur, GA ($195,500/8 years)
- Avstar Mortgage Corp., Blue Bell, PA ($192,000/8 years)
- National Charter Mortgage Corp., Gardena, CA ($100,000/3 years)
- Milestone Mortgage Corp., LaPalma, CA ($88,000/5 years)
- Heartland Mortgage Inc., Tucson, AZ ($33,000/3 years)
- Morgan Home Funding Corp., Rockville, MD ($25,000/3 years)
- Specialty Mortgage Corp., Hialeah, FL ($8,000/3 years)
- Whitehall Funding, Inc., Indianapolis, IN ($5,500/5 years)
Thirty-eight of the 55 lenders reached settlement agreements with the Mortgagee Review Board, which included over a million dollars in civil penalties and the indemnification of 161 loans (equivalent to about $4.8 million in potential savings to the FHA insurance fund.)
Two mortgage lenders who did not have valid state licenses were suspended from doing any government business: Island Mortgage Network, Inc., Melville, NY and Sunstate Mortgage (d/b/a Sun America Mortgage), Daytona Beach, FL.
Pat Rioux
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