[Federal Register Volume 75, Number 191 (Monday, October 4, 2010)]
[Notices]
[Pages 61164-61165]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-24827]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5411-N-03]


Credit Watch Termination Initiative Termination of Origination 
Approval Agreements

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Notice.

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SUMMARY: This notice advises of the cause and effect of termination of 
Origination Approval Agreements taken by HUD's Federal Housing 
Administration (FHA) against HUD-approved mortgagees through the FHA 
Credit Watch Termination Initiative. This notice includes a list of 
mortgagees which have had their Origination Approval Agreements 
terminated.

FOR FURTHER INFORMATION CONTACT: The Quality Assurance Division, Office 
of Housing, Department of Housing and Urban Development, 451 Seventh 
Street, SW., Room B133-P3214, Washington, DC 20410-8000; telephone 
(202) 708-2830 (this is not a toll-free number). Persons with hearing 
or speech impairments may access that number through TTY by calling the 
Federal Information Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: HUD has the authority to address 
deficiencies in the performance of lenders' loans as provided in HUD's 
mortgagee approval regulations at 24 CFR
    202.3. On May 17, 1999 HUD published a notice (64 FR 26769), on its 
procedures for terminating Origination Approval Agreements with FHA 
lenders and placement of FHA lenders on Credit Watch status (an 
evaluation period). In the May 17, 1999 notice, HUD advised that it 
would publish in the Federal Register a list of mortgagees, which have 
had their Origination Approval Agreements terminated.
    Termination of Origination Approval Agreement: Approval of a 
mortgagee by HUD/FHA to participate in FHA mortgage insurance programs 
includes an Origination Approval Agreement (Agreement) between HUD and 
the mortgagee. Under the Agreement, the mortgagee is authorized to 
originate single-family mortgage loans and submit them to FHA for 
insurance endorsement. The Agreement may be terminated on the basis of 
poor performance of FHA-insured mortgage loans originated by the 
mortgagee. The termination of a mortgagee's Agreement is separate and 
apart from any action taken by HUD's Mortgagee Review Board under HUD's 
regulations at 24 CFR part 25.
    Cause: HUD's regulations permit HUD to terminate the Agreement with 
any mortgagee having a default and claim rate for loans endorsed within 
the preceding 24 months that exceeds 200 percent of the default and 
claim rate within the geographic area served by a HUD field office, and 
also exceeds the national default and claim rate. For the 43rd review 
period, HUD is terminating the Agreement of mortgagees whose default 
and claim rate exceeds both the national rate and 200 percent of the 
field office rate.
    Effect: Termination of the Agreement precludes that branch(es) of 
the mortgagee from originating FHA-insured single-family mortgages 
within the area of the HUD field office(s) listed in this notice. 
Mortgagees authorized to purchase, hold, or service FHA insured 
mortgages may continue to do so.
    Loans that closed or were approved before the termination became 
effective may be submitted for insurance endorsement. Approved loans 
are those already underwritten and approved by a DE underwriter, and 
cases covered by a firm commitment issued by HUD. Cases at earlier 
stages of processing cannot be submitted for insurance by the 
terminated branch; however, they may be transferred for completion of 
processing and underwriting to another FHA insured mortgagee with 
direct endorsement approval for the area covered by the termination. 
Mortgagees are obligated to continue to pay existing insurance premiums 
and meet all other obligations associated with insured mortgages.
    A terminated mortgagee may apply for reinstatement of the 
Origination Approval Agreement if the Approval for the affected branch 
or branches has been terminated for at least six months and the 
mortgagee continues to be an approved mortgagee meeting the 
requirements of 24 CFR 202.5, 202.6, 202.7, 202.8 and 202.12. However, 
Mortgagee Letter 2010-20 and Final Rule 5356-F-02 at 24 CFR 202 
eliminates FHA approval for loan correspondents after December 31, 
2010. Therefore, HUD will not accept requests for reinstatement from 
loan correspondents after that date. The mortgagee's application for 
reinstatement must be in a format prescribed by the Secretary and 
signed by the mortgagee. In addition, the application must be 
accompanied by an independent analysis of the terminated office's 
operations as well as its mortgage production, specifically including 
the FHA-insured mortgages cited in its termination notice. This 
independent analysis shall identify the underlying cause for the 
mortgagee's high default and claim rate. The analysis must be prepared 
by an independent Certified Public Accountant (CPA) qualified to 
perform audits under Government Auditing Standards as provided by the 
Government Accountability Office. The mortgagee must also submit a 
written corrective action plan to address each of the issues identified 
in the CPA's report, along with evidence that the plan has been 
implemented. The application for a new Agreement should be in the form 
of a letter, accompanied by the CPA's

[[Page 61165]]

report and corrective action plan. The request should be sent to the 
Director, Office of Lender Activities and Program Compliance, 451 
Seventh Street, SW., Room B133-P3214, Washington, DC 20410-8000 or by 
courier to 490 L'Enfant Plaza, East, SW., Suite 3214, Washington, DC 
20024-8000.
    Action: The following mortgagees have had their Origination 
Agreements terminated by HUD:

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                                                                                                             Termination
           Mortgagee name                    Mortgagee branch address          HUD office jurisdictions     effective date      Homeownership centers
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Access National Mortgage Corporation  1800 Robert Fulton Drive, Ste 350,     Atlanta....................           7/9/2010  Atlanta.
                                       Reston, VA 20191.
Access National Mortgage Corporation  1800 Robert Fulton Drive, Ste 350,     Boston.....................           7/9/2010  Philadelphia.
                                       Reston, VA 20191.
Access National Mortgage Corporation  1800 Robert Fulton Drive, Ste 350,     Greensboro.................           7/9/2010  Atlanta.
                                       Reston, VA 20191.
Allied Home Mortgage Capital          6110 Pinemont Drive, Ste 215,          Baltimore..................          5/27/2010  Philadelphia.
 Corporation.                          Houston, TX 77092.
1st Continental Mortgage Inc........  2691 E. Oakland Park Blvd., Ste 2,     Tampa......................          5/20/2010  Atlanta.
                                       Ft. Lauderdale, FL 33306.
American First Mortgage LLC.........  7155 Kerr Plaza, Olive Branch, MS      Memphis....................          5/20/2010  Atlanta.
                                       38654.
Amerinet Financial LLC..............  16201 Trade Zone Ave, Ste 101, Upper   Washington.................          5/20/2010  Philadelphia.
                                       Marlboro, MD 20774.
Associated Capital Resources Inc....  706 East Bell Road, Ste 100, Phoenix,  Phoenix....................          5/20/2010  Santa Ana.
                                       AZ 85022.
Castle Home Mortgage Corp...........  1600 Route 22, East, Union, NJ 07083.  Newark.....................          5/20/2010  Philadelphia.
Dell Franklin Financial LLC.........  7061 Columbia Gateway Dr, Ste 110,     Washington.................          5/20/2010  Philadelphia.
                                       Columbia, MD 21046.
Dell Franklin Financial LLC.........  7061 Columbia Gateway Dr, Ste 110,     Richmond...................          5/20/2010  Philadelphia.
                                       Columbia, MD 21046.
EMI Equity Mortgage INC.............  1651 Ave Ponce De Leon, San Juan, PR   Caribbean..................          5/28/2010  Atlanta.
                                       00909.
First Mortgage Group INC............  118 Moulton Street East, Ste 2,        Birmingham.................          5/28/2010  Atlanta.
                                       Decatur, AL 35601.
Fox Valley Mortgage Group...........  455 East Main Street, East Dundee, IL  Chicago....................           7/9/2010  Philadelphia.
                                       60118.
Hanover Funding INC.................  7 Kingsbridge Road, Fairfield, NJ      Newark.....................          5/20/2010  Philadelphia.
                                       07004.
JPMorgan Chase Bank NA..............  900 Stewart Avenue, Garden City, NY    Atlanta....................          7/11/2010  Atlanta.
                                       11530.
JPMorgan Chase Bank NA..............  900 Stewart Avenue, Garden City, NY    New Orleans................          7/11/2010  Denver.
                                       11530.
Key Financial Corporation...........  3631 131st Avenue North, Clearwater,   Baltimore..................           7/1/2010  Philadelphia.
                                       FL 33762-4263.
Midwest Funding Group...............  6343 Presidential Gateway, Columbus,   Columbus...................          5/20/2010  Atlanta.
                                       OH 43231-7695.
Mortgage Plus INC...................  67 Walnut Avenue, Ste 310, Clark, NJ   Newark.....................          5/28/2010  Philadelphia.
                                       07066-1687.
Pacific Coast Mortgage INC..........  6991 East Camelback Rd., Ste C250,     Phoenix....................          5/28/2010  Santa Ana.
                                       Scottsdale, AZ 85251-2452.
Preferred Lending Group LLC.........  9700 63rd Ave. N Ste 205, Maple        Minneapolis................           6/1/2010  Denver.
                                       Grove, MN 55369.
Real Estate Mortgage Network, Inc...  70 Grand Avenue, River Edge, NJ 07661  Atlanta....................           7/2/2010  Atlanta.
Residential Mortgage Corp...........  1332 Andrea Street, Bowling Green, KY  Louisville.................           6/1/2010  Atlanta.
                                       42104-3334.
Summit Funding......................  2601 Fair Oaks Boulevard, Sacramento,  Fort Worth.................           7/1/2010  Denver.
                                       CA 95864.
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    Dated: September 23, 2010.
David H. Stevens,
Assistant Secretary for Housing--Federal Housing Commissioner.
[FR Doc. 2010-24827 Filed 10-1-10; 8:45 am]
BILLING CODE 4210-67-P