[Federal Register Volume 62, Number 166 (Wednesday, August 27, 1997)]
[Notices]
[Pages 45432-45434]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-22722]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4209-N-03]


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: Morris E. Carter, Director, Office of 
Lender Activities and Program Compliance, 451 Seventh Street, S.W., 
Washington, DC 20410, telephone: (202) 708-1515. (This is not a toll-
free number). A Telecommunications Device for Hearing and Speech-
Impaired Individuals (TTY) is available at 1-800-877-8339 (Federal 
Information Relay Service).

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 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 April 12, 1997 through July 17, 1997.

1. First Choice Mortgage LLC, Burr Ridge, Illinois

    Action: Withdrawal of HUD-FHA mortgagee approval and a proposed 
civil money penalty of $200,000.

[[Page 45433]]

    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
requirements that included: failure to remit to HUD-FHA One-Time 
Mortgage Insurance Premiums (OTMIPs) within 15 days after loan closing, 
and, to timely remit late charges and interest; and failure to 
implement a Quality Control Plan.

2. InterAmerican Mortgage Corp., Rosedale, New York

    Action: Withdrawal of HUD-FHA mortgagee approval and a proposed 
civil money penalty of $100,000.
    Cause: A HUD monitoring review that cited violations of HUD-FHA 
requirements that included: use of alleged false documentation or 
conflicting information to approve mortgagors; failure to report 
fraudulent activity to HUD-FHA; closing loans that exceeded HUD-FHA 
maximum mortgage amounts; closing an unauthorized loan to an investor; 
failure to properly verify the source and/or adequacy of mortgagors' 
funds for the downpayment and/or funds to close; employing a loan 
officer that was not an exclusive employee; failure to maintain a 
Quality Control Plan in compliance with HUD-FHA requirements; failure 
to reflect all charges to the buyers and sellers on the HUD-l 
Settlement Statements; charging borrowers fees that are not in 
compliance with HUD-FHA requirements; and loan pricing based on loan 
amounts.

3. AFI Mortgage Corporation, Shawnee, Kansas

    Action: Withdrawal of HUD-FHA mortgagee approval.
    Cause: Violations of the Department's requirements that included: 
failure to remit payments to Government National Mortgage Association 
(GNMA) securities' holders in connection with liquidated mortgages in 
GNMA mortgage-backed securities pools; and failure to meet HUD-FHA net 
worth requirements for approval as a mortgagee.

4. LIDD Enterprises, Inc., d/b/a Southern California Funding, 
Pasadena, California

    Action: Withdrawal of HUD-FHA Title I lender approval.
    Cause: Use of false and misleading advertising in the Title I 
Property Improvement Home Loan Program.

5. Carlton Mortgage Services, Inc., Palatine, Illinois

    Action: Proposed Settlement Agreement that would include: payment 
to the Department of a civil money penalty in the amount of $15,000; 
indemnification for any claim losses in connection with three 
improperly originated HUD-FHA insured mortgages; a refund of the 
mortgage insurance premium to a borrower in connection with an 
uninsured loan; and corrective action to assure compliance with HUD-FHA 
requirements.
    Cause: A HUD monitoring review that disclosed violations of HUD-FHA 
requirements that included: failure to timely remit One-Time Mortgage 
Insurance Premiums (OTMIPs); failure to properly calculate mortgagors' 
income and/or debt ratios; permitting ``sweat equity'' to be escrowed; 
and failure to implement an adequate Quality Control Plan.

6. Mortgage Capital Resource Corporation, Santa Ana, California

    Action: Proposed Settlement Agreement that would include: a payment 
to the Department in the amount of $35,000; indemnification for any 
claim loss in connection with one HUD-FHA insured mortgage; and 
corrective action to assure compliance with HUD-FHA requirements.
    Cause: Violations of the Department's requirements that included: 
failure to perform quality control reviews of branch offices; failure 
to perform timely quality control reviews; and failure to disclose in 
the company's annual audited financial statement that the Department 
was considering administrative action against the company.

7. Consumer Home Mortgage, Inc., Melville, New York

    Action: Settlement Agreement that includes: indemnification to the 
Department for claim losses in connection with 27 improperly originated 
HUD-FHA insured mortgages; corrective action to assure compliance with 
HUD-FHA requirements; and payment to the Department of a civil money 
penalty in the amount of $75,000.
    Cause: A HUD monitoring review that cited violations of HUD-FHA 
home mortgage insurance program violations that included: using alleged 
false information in originating HUD-FHA insured mortgages; failure to 
ensure that mortgagors met their minimum required investment; failure 
to verify the source of funds for mortgagors' downpayment and/or 
closing costs; permitting mortgagors to sign documents in blank; and, 
adding non-occupant co-mortgagors to loans for the purpose of 
qualifying the mortgagors.

8. Madison Home Equities, Inc., Lake Success, New York

    Action: Settlement Agreement that includes: indemnification to the 
Department for claim losses in connection with 31 improperly originated 
HUD-FHA insured mortgages; corrective action to assure compliance with 
HUD-FHA requirements; and payment to the Department of a civil money 
penalty in the amount of $51,000.
    Cause: A HUD monitoring review that cited violations of HUD-FHA 
requirements that included: failure to properly verify and document the 
source of mortgagors' funds used for downpayment and closing costs; 
using unsubstantiated credit given to mortgagors in determining the 
mortgagors' investment; using alleged false information to originate 
HUD-FHA insured mortgages; submitting an alleged false property 
inspection report; miscalculating a mortgagor's required investment; 
failure to accurately reflect disbursements on HUD-l Settlement 
Statements; and failure to establish, maintain, and implement a Quality 
Control Plan in compliance with HUD-FHA requirements.

9. Mortgagees and Title I Lenders That Failed To Comply With HUD-
FHA Requirements for the Submission of an Audited Annual Financial 
Statement and/or Payment of the Annual Recertification Fee

    Action: Withdrawal of HUD-FHA mortgagee approval and Title I lender 
approval.
    Cause: Failure to submit to the Department the required annual 
audited financial statement and/or remit the required annual 
recertification fee.
    Mortgagees withdrawn: Associated Funding Services, Inc., Hickory 
Hills, IL; first Mecklenburg Mortgage Corp., Charlotte, NC; Tower 
Mortgage Corp., Austin, TX; Home Loans of America, Downey, CA; National 
Guaranty Mortgage Corp., Atlanta, GA; Chase Federal Bank FSB, Miami, 
FL; Citizens Mortgage Corp., Atlanta, GA; American Financial Mortgage, 
Decatur, GA; First Federal Savings Bank, Leitchfield, KY; First Liberty 
Bank, Macon, GA; Weymouth Savings Bank, Weymouth, MA; Bankunited, Coral 
Gables, FL; Home Owners Funding Corp. of America, Dallas, TX; Mortgages 
Unlimited Inc., Fair Oaks, CA; Community Mortgage Investment, 
Blythewood, SC; Great Five Percent Real Estate Company, Covina, CA; 
Puget Sound Mortgage Escrow Inc., Poulsbo, WA; First Intercity 
Mortgage, Campbell, CA; Hartford Bancorp, Lancaster, CA;

[[Page 45434]]

Wogo, Inc., Palmdale, CA; Citi Lites Realty Inc., Rancho Cucamonga, CA; 
Peninsula Bank of San Diego, San Diego, CA; First American Savings 
Bank, Bedford, TX; Smith Solomon, Temple City, CA. Title I lenders 
withdrawn: Home Loans of America, Downey, CA; Kinsley Bank, Kinsley, 
KS; First Mecklenburg Mortgage Company, Charlotte, NC; Coop Ahorry 
Credito Maunabo, Maunabo, PR; SD Mortgage Associates, Inc., San Diego, 
CA; All American Funding Inc., Santa Monica, CA; Conduit Acceptance 
Corp., Dallas, TX; Homeland Savings Bank, Waterloo, IA; Antelope 
Financial Inc., Lancaster, CA; Eggie Mortgage Inc., d/b/a Rockland 
Financial, Sherman Oaks, CA; Great Five Percent Real Estate Company, 
Covina, CA; Wogo Inc d/b/a Regency Financial, Palmdale, CA; Platinum 
USA Home Loan Inc., Las Vegas, NV; Community Mortgage Investment, 
Blythewood, SC; New York Central Mortgage Inc., Tarzana, CA; Mortgage 
America Nationwide, Grand Terrace, CA.

    Dated: August 21, 1997.
Nicolas P. Retsinas,
Assistant Secretary for Housing-Federal Housing, Commissioner.
[FR Doc. 97-22722 Filed 8-26-97; 8:45 am]
BILLING CODE 4210-27-P