Mortgagee Review Board: Administrative Actions, 11149-11151 [2012-4328]
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Federal Register / Vol. 77, No. 37 / Friday, February 24, 2012 / Notices
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DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
Federal Property Suitable as Facilities
To Assist the Homeless
Office of the Assistant
Secretary for Community Planning and
Development, HUD.
ACTION: Notice.
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BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–5615–N–01]
Mortgagee Review Board:
Administrative Actions
Office of the Assistant
Secretary for Housing—Federal Housing
Commissioner, Department of Housing
and Urban Development (HUD).
ACTION: Notice.
AGENCY:
FOR FURTHER INFORMATION CONTACT:
[Docket No. FR–5601–N–08]
This Notice identifies
unutilized, underutilized, excess, and
surplus Federal property reviewed by
HUD for suitability for possible use to
assist the homeless.
FOR FURTHER INFORMATION CONTACT:
Juanita Perry, Department of Housing
and Urban Development, 451 Seventh
[FR Doc. 2012–4155 Filed 2–23–12; 8:45 am]
In compliance with Section
202(c)(5) of the National Housing Act,
this notice advises of the cause and
description of administrative actions
taken by HUD’s Mortgagee Review
Board against HUD-approved
mortgagees.
BILLING CODE 9111–28–P
SUMMARY:
Dated: February 16, 2012.
Mark R. Johnston,
Deputy Assistant Secretary for Special Needs.
SUMMARY:
[FR Doc. 2012–4275 Filed 2–23–12; 8:45 am]
AGENCY:
Street SW., Room 7262, Washington, DC
20410; telephone (202) 708–1234; TTY
number for the hearing- and speechimpaired (202) 708–2565, (these
telephone numbers are not toll-free), or
call the toll-free Title V information line
at 800–927–7588.
SUPPLEMENTARY INFORMATION: In
accordance with the December 12, 1988
court order in National Coalition for the
Homeless v. Veterans Administration,
No. 88–2503–OG (D.D.C.), HUD
publishes a Notice, on a weekly basis,
identifying unutilized, underutilized,
excess and surplus Federal buildings
and real property that HUD has
reviewed for suitability for use to assist
the homeless. Today’s Notice is for the
purpose of announcing that no
additional properties have been
determined suitable or unsuitable this
week.
Nancy A. Murray, Secretary to the
Mortgagee Review Board, 451 Seventh
Street SW., Room B–133/3150,
Washington, DC 20410–8000; telephone
202–708–2224 (this is not a toll-free
number). Persons with hearing or
speech impairments may access this
number through TTY by calling the tollfree Federal Relay Service at 800–877–
8339.
SUPPLEMENTARY INFORMATION: Section
202(c)(5) of the National Housing Act
(12 U.S.C. 1708(c)(5)), requires that
HUD ‘‘publish in the Federal Register a
description of and the cause for
administrative action against a [HUDapproved] mortgagee’’ by the
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11149
Department’s Mortgagee Review Board
(‘‘Board’’). In compliance with the
requirements of Section 202(c)(5), this
notice advises of actions that have been
taken by the Board from February 14,
2011, to July 20, 2011.
I. Settlement Agreements, Civil Money
Penalties, Withdrawals of FHA
Approval, Suspensions, Probations,
Reprimands, and Administrative
Payments
1. Action Mortgage Corporation,
Cranston, RI [Docket No. 10–1855–MR]
Action: On June 15, 2011, the Board
issued a Notice of Administrative
Action permanently withdrawing the
FHA approval of Action Mortgage
Corporation (‘‘AMC’’).
Cause: The Board took this action
based on the following violations of
HUD/FHA requirements alleged by
HUD: AMC entered into an agreement
with HUD on August 5, 2010, to resolve
violations of HUD/FHA requirements
regarding its use of the official HUD seal
on its Web site. AMC agreed to pay a
civil monetary penalty. AMC failed to
remit the entire amount owed to HUD
pursuant to the settlement agreement.
2. Allen Mortgage LC, Centennial Park,
AZ [Docket No. 11–1152–MR]
Action: On September 14, 2011, the
Board entered into a Settlement
Agreement with Allen Mortgage, LC
(‘‘Allen’’) that required Allen to pay a
civil money penalty in the amount of
$12,500, without admitting fault or
liability.
Cause: The Board took this action
based on the following violations of
HUD/FHA requirements alleged by
HUD: Allen failed to notify the
Department that Allen, its principals,
and its originators had entered into a
consent order with the state of
Washington that required the payment
of an $11,000 fine for originating
mortgages in the state without originator
licenses; failed to notify the Department
that it entered into a consent order with
the state of Arkansas, which required
the payment of a $1,500 penalty for
failing to file its annual report; and
falsely certified on its 2010 Yearly
Verification Report that it had not been
involved in a state proceeding that
resulted in adverse action and had not
relinquished a license in any
jurisdiction in which it originates or
services FHA-insured mortgages.
3. AmericaHomeKey, Inc., Dallas, TX
[Docket No. 11–1156–MR]
Action: On June 15, 2011, the Board
entered into a Settlement Agreement
with AmericaHomeKey, Inc. (‘‘AHK’’)
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that required AHK to pay a civil money
penalty in the amount of $138,900,
without admitting fault or liability.
Cause: The Board took this action
based on the following violation of
HUD/FHA requirements alleged by
HUD: AHK failed to timely remit
upfront mortgage insurance premiums
to HUD/FHA.
4. Branch Bank and Trust Company,
Wilson, NC [Docket No. 10–2000–MR]
Action: On June 10, 2011, the Board
entered into a Settlement Agreement
with Branch Bank and Trust Company
(‘‘BB&T’’) that required BB&T to pay a
civil money penalty in the amount of
$215,000, without admitting fault or
liability, and to remit outstanding MIPs
and late fees owed by BB&T and/or its
subsidiary, Liberty Mortgage
Corporation.
Cause: The Board took this action
based on the following violations of
HUD/FHA requirements alleged by
HUD: BB&T and its subsidiary, Liberty
Mortgage Corp., failed to timely remit
mortgage insurance premiums to HUD/
FHA, and failed to notify HUD/FHA
within 15 days of the termination of
contracts of mortgage insurance.
srobinson on DSK4SPTVN1PROD with NOTICES
5. Cornerstone Mortgage Company,
Houston, TX [Docket No. 10–1995–MR]
Action: On March 1, 2011, the Board
entered into a Settlement Agreement
with Cornerstone Mortgage Company
(‘‘Cornerstone’’) that required
Cornerstone to pay a civil money
penalty in the amount of $7,500,
without admitting fault or liability.
Cause: The Board took this action
based on the following violations of
HUD/FHA requirements alleged by
HUD: Cornerstone failed to timely remit
mortgage insurance premiums to HUD.
6. First American Mortgage Trust,
Brookline, MA [Docket No. 10–1960–
MR]
Action: On April 7, 2011, the Board
entered into a Settlement Agreement
with First American Mortgage Trust
(‘‘FAMT’’) that required FAMT to
indemnify the Department for losses on
five loans; refund $9,368.38 in
impermissible fees charged to
borrowers; and pay a civil money
penalty in the amount of $72,500,
without admitting fault or liability.
Cause: The Board took this action
based on the following violations of
HUD/FHA requirements alleged by
HUD: FAMT failed to implement an
adequate Quality Control (‘‘QC’’) Plan
during the years 2006, 2007, 2008 and
2009; failed to report to the Department
serious deficiencies and patterns of
noncompliance in twenty loans that
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FAMT discovered during QC reviews;
approved loans that did not meet FHA’s
minimum credit requirements;
approved a loan with a total fixed
payment-to-income ratio that exceeded
FHA benchmarks without significant
compensating factors and without
documentation sufficient to support
those factors; failed to properly
calculate the income used to qualify the
borrowers in two loans; failed to ensure
that parties were not charged fees that
were excessive or unreasonable for the
services provided; and failed to provide
adequate documentation to support the
excessive interest rate and discount
points charged to borrowers.
7. First Guaranty Mortgage Corporation,
McLean, VA [Docket No. 10–2019–MR]
Action: On April 14, 2011, the Board
entered into a Settlement Agreement
with First Guaranty Mortgage
Corporation (‘‘FGMC’’) that required
FGMC to indemnify the Department for
its existing and future losses on twentyone loans, including losses totaling
$91,008.12; refund $17,702.25 in
improper fees charged to borrowers; and
pay a civil money penalty in the amount
of $127,500, without admitting fault or
liability.
Cause: The Board took this action
based on the following violations of
HUD/FHA requirements alleged by
HUD: FGMC approved 30 FHA-insured
mortgage loans for borrowers who did
not meet HUD/FHA’s minimum credit
requirements; approved four loans with
debt-to-income ratios that exceed HUD’s
benchmarks without documentation of
significant compensating factors; failed
to adequately document the source of
gift funds used to close a loan; failed to
ensure that a credit qualification on a
streamline refinance loan transaction
was completed as required; permitted
loan correspondents to be improperly
compensated with mortgage broker fees;
failed to ensure that commitment fees
were properly charged in accordance
with HUD requirements; and failed to
conduct pre-insurance reviews or
ensure the accuracy of data submitted to
HUD through FHA Connection, as
required by HUD’s Lender Insurance
Program.
8. Gateway Funding Diversified
Mortgage Services, LP, Horsham, PA
[Docket No. 11–1150–MR]
Action: On June 15, 2011, the Board
entered into a Settlement Agreement
with Gateway Funding Diversified
Mortgage Services, LP (‘‘GFDMS’’) that
required GFDMS to pay a civil money
penalty in the amount of $16,950,
without admitting fault or liability.
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Cause: The Board took this action
based on the following violations of
HUD/FHA requirements alleged by
HUD: GFDMS failed to timely remit
upfront mortgage insurance premiums
to HUD.
9. James B. Nutter & Company, Kansas
City, MO [Docket No. 11–1158–MR]
Action: On June 23, 2011, the Board
entered into a Settlement Agreement
with James B. Nutter & Company
(‘‘JBN’’) that required JBN to pay a civil
money penalty in the amount of
$19,000, without admitting fault or
liability.
Cause: The Board took this action
based on the following violation of
HUD/FHA requirements alleged by
HUD: JBN failed to timely remit upfront
mortgage insurance premiums to HUD.
10. MCS Mortgage Bankers, Inc.,
Patchogue, New York [Docket No. 11–
1154–MR]
Action: On July 20, 2011, the Board
entered into a Settlement Agreement
with MCS Mortgage Bankers, Inc.
(‘‘MCS’’) that required MCS to pay a
civil money penalty in the amount of
$23,500 and indemnify HUD/FHA for
any losses incurred on three HUD/FHAinsured loans, without admitting fault
or liability.
Cause: The Board took this action
based on the following violations of
HUD/FHA requirements alleged by
HUD: MCS disseminated a
misrepresentative advertisement to the
public; failed to properly analyze
borrowers’ credit in connection with
two HUD/FHA-insured mortgage loans;
failed to resolve inconsistencies and/or
discrepancies when originating and/or
underwriting a HUD/FHA-insured
mortgage loan; failed to ensure
compliance with HUD’s 203(k) program
by failing to demonstrate that the
completed construction would meet
FHA’s minimum property standards
and/or comply with the local building
code; originated a HUD/FHA 203(k)
mortgage on an ineligible property;
accepted and closed loans that were
originated by individuals who were not
exclusively employed by MCS; and
failed to properly verify rental income
by obtaining the required tax
documentation.
11. Peoples Home Equity Inc.,
Brentwood, TN [Docket No. 10–2016–
MR]
Action: On March 25, 2011, the Board
entered into a Settlement Agreement
with Peoples Home Equity Inc.
(‘‘Peoples Home’’) that required Peoples
Home to buy down the principal
balance of a loan in the amount of
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Federal Register / Vol. 77, No. 37 / Friday, February 24, 2012 / Notices
$2,868; indemnify the Department on
this loan for a period of five years; and
pay a civil money penalty in the amount
of $7,500, without admitting fault or
liability.
Cause: The Board took this action
based on the following violations of
HUD/FHA requirements alleged by
HUD: Peoples Home failed to comply
with HUD/FHA’s rules prohibiting
property flipping; failed to ensure that
the borrowers made the required
minimum investment in the property;
originated a loan that exceeded the
maximum insured mortgage amount;
and charged an impermissible tax
service fee.
12. PHH Mortgage Corporation, Mount
Laurel, NJ [Docket No. 10–1997–MR]
Action: On April 14, 2011, the Board
entered into a Settlement Agreement
with PHH Mortgage Corp. (‘‘PHH’’) that
required PHH to pay a civil money
penalty in the amount of $256,000,
without admitting fault or liability.
Cause: The Board took this action
based on the following violations of
HUD/FHA requirements alleged by
HUD: PHH failed to timely remit
mortgage insurance premiums to HUD/
FHA, and failed to notify HUD/FHA
within 15 calendar days of the
termination of mortgage insurance
contracts.
srobinson on DSK4SPTVN1PROD with NOTICES
13. Priority Bank, Ozark, AR [Docket
No. 10–1795–MR]
Action: On February 14, 2011, the
Board entered into a Settlement
Agreement with Priority Bank that
required Priority Bank to pay a civil
money penalty in the amount of
$50,000, without admitting fault or
liability.
Cause: The Board took this action
based on the following violations of
HUD/FHA requirements alleged by
HUD: Priority Bank failed to maintain
and implement a Quality Control Plan
in accordance with HUD/FHA’s
requirements, and paid compensation in
the form of commissions to an employee
performing underwriting activities.
14. ResMac, Inc., Sunrise, FL [Docket
No. 11–1126–MR]
Action: On April 15, 2011, the Board
entered into a Settlement Agreement
with ResMac, Inc. (‘‘ResMac’’) that
required ResMac to pay a civil money
penalty in the amount of $50,000,
without admitting fault or liability. In
addition, ResMac was required to
submit to HUD restated financial
statements for fiscal year ended
December 31, 2009, in which ResMac
reclassified the net book value of all
intangible assets.
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Cause: The Board took this action
based on the following violations of
HUD/FHA requirements alleged by
HUD: ResMac misrepresented the
identity of its president on its January
2, 2009, application for FHA approval;
failed to timely notify HUD of a state
regulatory sanction imposed upon its
president; and failed to submit an
acceptable Independent Public
Accountant’s Computation of Adjusted
Net Worth for the end of fiscal year
2009.
15. Universal Lending Corporation,
Denver, CO [Docket No. 10–2003–MR]
Action: On April 14, 2011, the Board
entered into a Settlement Agreement
with Universal Lending Corporation
(‘‘Universal’’) that required Universal to:
indemnify HUD for any future losses on
six FHA-insured mortgage loans;
reimburse HUD for losses in the amount
of $496,727.53 for mortgage insurance
claims paid by HUD; and pay a civil
money penalty in the amount of
$45,500, without admitting fault or
liability.
Cause: The Board took this action
based on the following violations of
HUD/FHA requirements alleged by
HUD: Universal improperly entered
incorrect information as ‘‘cash reserves’’
into HUD’s automated underwriting
system in order to receive approvals for
seven loans; failed to adequately
document the stability of borrowers’
employment or income and failed to
adequately document other income used
to qualify borrowers; failed to consider
mortgage payment debt and liabilities
when underwriting and approving FHAinsured loans; failed to adequately
document the source of gift funds for
one loan; and failed to obtain
confirmation concerning cash saved at
home with regard to two other loans.
II. Lenders That Failed To Timely Meet
Requirements for Annual
Recertification of HUD/FHA Approval
and Have Cured
Action: The Board entered into
settlement agreements with each of the
lenders listed below requiring each of
the lenders to pay $3,500 in civil money
penalties, without admitting fault or
liability.
Cause: The Board took this action
because the lenders failed to timely
comply with HUD’s annual
recertification requirements, but
subsequently came into compliance.
1. American Homestar Mortgage, LLC,
League City, TX [Docket No. 11–1196–
MR]
2. Merrill Lynch Mortgage Lending,
Inc., New York, NY [Docket No. 11–
1138–MRT]
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11151
3. Southpoint Financial Services, Inc.,
Alpharetta, GA [Docket No. 11–1197–
MR]
4. United Bank, Charleston, WV
[Docket No. 11–1141–MRT]
5. Wendover Financial Services
Corporation, Chesterbrook, PA [Docket
No. 11–1198–MR]
6. World Alliance Financial Corp.,
Melville, NY [Docket No. 11–1143–
MRT]
Dated: February 16, 2012.
Carol J. Galante,
Acting Assistant Secretary for Housing,
Federal Housing Commissioner.
[FR Doc. 2012–4328 Filed 2–23–12; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF THE INTERIOR
[Docket No. ONRR–2012–002]
Notice Seeking Comment on the
Extractive Industries Transparency
Initiative
Office of the Secretary, Interior.
Notice.
AGENCY:
ACTION:
The Department of the
Interior (Department) requests
comments and suggestions from affected
parties and the interested public prior to
convening a multi-stakeholder group
tasked to implement the Extractive
Industries Transparency Initiative
(EITI). This notice solicits comments
and suggestions for review by a third
party neutral facilitator for possible
stakeholders who should be considered
for inclusion in the multi-stakeholder
group. Getting feedback upfront and
involving all affected stakeholders in
the EITI process are the hallmarks of
good government and smart business
practice. Additionally, this notice seeks
comments for the facilitator on effective
and productive processes for convening
the multi-stakeholder group. Finally,
this notice seeks comments and
suggestions for the facilitator for
effective collaboration by the multistakeholder group in order to implement
EITI. The Department will announce
any public listening sessions in a future
Federal Register notice.
DATES: You must submit your comments
by April 9, 2012.
ADDRESSES: You may submit comments
on this notice by any of the following
methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. In the entry titled
‘‘Enter Keyword or ID,’’ enter ONRR–
2012–002, then click search. Follow the
instructions to submit public comments
and view supporting and related
SUMMARY:
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]]>Agencies
[Federal Register Volume 77, Number 37 (Friday, February 24, 2012)]
[Notices]
[Pages 11149-11151]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-4328]
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5615-N-01]
Mortgagee Review Board: Administrative Actions
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, Department of Housing and Urban Development (HUD).
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: In compliance with Section 202(c)(5) of the National Housing
Act, this notice advises of the cause and description of administrative
actions taken by HUD's Mortgagee Review Board against HUD-approved
mortgagees.
FOR FURTHER INFORMATION CONTACT: Nancy A. Murray, Secretary to the
Mortgagee Review Board, 451 Seventh Street SW., Room B-133/3150,
Washington, DC 20410-8000; telephone 202-708-2224 (this is not a toll-
free number). Persons with hearing or speech impairments may access
this number through TTY by calling the toll-free Federal Relay Service
at 800-877-8339.
SUPPLEMENTARY INFORMATION: Section 202(c)(5) of the National Housing
Act (12 U.S.C. 1708(c)(5)), requires that HUD ``publish in the Federal
Register a description of and the cause for administrative action
against a [HUD-approved] mortgagee'' by the Department's Mortgagee
Review Board (``Board''). In compliance with the requirements of
Section 202(c)(5), this notice advises of actions that have been taken
by the Board from February 14, 2011, to July 20, 2011.
I. Settlement Agreements, Civil Money Penalties, Withdrawals of FHA
Approval, Suspensions, Probations, Reprimands, and Administrative
Payments
1. Action Mortgage Corporation, Cranston, RI [Docket No. 10-1855-MR]
Action: On June 15, 2011, the Board issued a Notice of
Administrative Action permanently withdrawing the FHA approval of
Action Mortgage Corporation (``AMC'').
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: AMC entered into an agreement
with HUD on August 5, 2010, to resolve violations of HUD/FHA
requirements regarding its use of the official HUD seal on its Web
site. AMC agreed to pay a civil monetary penalty. AMC failed to remit
the entire amount owed to HUD pursuant to the settlement agreement.
2. Allen Mortgage LC, Centennial Park, AZ [Docket No. 11-1152-MR]
Action: On September 14, 2011, the Board entered into a Settlement
Agreement with Allen Mortgage, LC (``Allen'') that required Allen to
pay a civil money penalty in the amount of $12,500, without admitting
fault or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Allen failed to notify the
Department that Allen, its principals, and its originators had entered
into a consent order with the state of Washington that required the
payment of an $11,000 fine for originating mortgages in the state
without originator licenses; failed to notify the Department that it
entered into a consent order with the state of Arkansas, which required
the payment of a $1,500 penalty for failing to file its annual report;
and falsely certified on its 2010 Yearly Verification Report that it
had not been involved in a state proceeding that resulted in adverse
action and had not relinquished a license in any jurisdiction in which
it originates or services FHA-insured mortgages.
3. AmericaHomeKey, Inc., Dallas, TX [Docket No. 11-1156-MR]
Action: On June 15, 2011, the Board entered into a Settlement
Agreement with AmericaHomeKey, Inc. (``AHK'')
[[Page 11150]]
that required AHK to pay a civil money penalty in the amount of
$138,900, without admitting fault or liability.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: AHK failed to timely remit
upfront mortgage insurance premiums to HUD/FHA.
4. Branch Bank and Trust Company, Wilson, NC [Docket No. 10-2000-MR]
Action: On June 10, 2011, the Board entered into a Settlement
Agreement with Branch Bank and Trust Company (``BB&T'') that required
BB&T to pay a civil money penalty in the amount of $215,000, without
admitting fault or liability, and to remit outstanding MIPs and late
fees owed by BB&T and/or its subsidiary, Liberty Mortgage Corporation.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: BB&T and its subsidiary,
Liberty Mortgage Corp., failed to timely remit mortgage insurance
premiums to HUD/FHA, and failed to notify HUD/FHA within 15 days of the
termination of contracts of mortgage insurance.
5. Cornerstone Mortgage Company, Houston, TX [Docket No. 10-1995-MR]
Action: On March 1, 2011, the Board entered into a Settlement
Agreement with Cornerstone Mortgage Company (``Cornerstone'') that
required Cornerstone to pay a civil money penalty in the amount of
$7,500, without admitting fault or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Cornerstone failed to timely
remit mortgage insurance premiums to HUD.
6. First American Mortgage Trust, Brookline, MA [Docket No. 10-1960-MR]
Action: On April 7, 2011, the Board entered into a Settlement
Agreement with First American Mortgage Trust (``FAMT'') that required
FAMT to indemnify the Department for losses on five loans; refund
$9,368.38 in impermissible fees charged to borrowers; and pay a civil
money penalty in the amount of $72,500, without admitting fault or
liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: FAMT failed to implement an
adequate Quality Control (``QC'') Plan during the years 2006, 2007,
2008 and 2009; failed to report to the Department serious deficiencies
and patterns of noncompliance in twenty loans that FAMT discovered
during QC reviews; approved loans that did not meet FHA's minimum
credit requirements; approved a loan with a total fixed payment-to-
income ratio that exceeded FHA benchmarks without significant
compensating factors and without documentation sufficient to support
those factors; failed to properly calculate the income used to qualify
the borrowers in two loans; failed to ensure that parties were not
charged fees that were excessive or unreasonable for the services
provided; and failed to provide adequate documentation to support the
excessive interest rate and discount points charged to borrowers.
7. First Guaranty Mortgage Corporation, McLean, VA [Docket No. 10-2019-
MR]
Action: On April 14, 2011, the Board entered into a Settlement
Agreement with First Guaranty Mortgage Corporation (``FGMC'') that
required FGMC to indemnify the Department for its existing and future
losses on twenty-one loans, including losses totaling $91,008.12;
refund $17,702.25 in improper fees charged to borrowers; and pay a
civil money penalty in the amount of $127,500, without admitting fault
or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: FGMC approved 30 FHA-insured
mortgage loans for borrowers who did not meet HUD/FHA's minimum credit
requirements; approved four loans with debt-to-income ratios that
exceed HUD's benchmarks without documentation of significant
compensating factors; failed to adequately document the source of gift
funds used to close a loan; failed to ensure that a credit
qualification on a streamline refinance loan transaction was completed
as required; permitted loan correspondents to be improperly compensated
with mortgage broker fees; failed to ensure that commitment fees were
properly charged in accordance with HUD requirements; and failed to
conduct pre-insurance reviews or ensure the accuracy of data submitted
to HUD through FHA Connection, as required by HUD's Lender Insurance
Program.
8. Gateway Funding Diversified Mortgage Services, LP, Horsham, PA
[Docket No. 11-1150-MR]
Action: On June 15, 2011, the Board entered into a Settlement
Agreement with Gateway Funding Diversified Mortgage Services, LP
(``GFDMS'') that required GFDMS to pay a civil money penalty in the
amount of $16,950, without admitting fault or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: GFDMS failed to timely remit
upfront mortgage insurance premiums to HUD.
9. James B. Nutter & Company, Kansas City, MO [Docket No. 11-1158-MR]
Action: On June 23, 2011, the Board entered into a Settlement
Agreement with James B. Nutter & Company (``JBN'') that required JBN to
pay a civil money penalty in the amount of $19,000, without admitting
fault or liability.
Cause: The Board took this action based on the following violation
of HUD/FHA requirements alleged by HUD: JBN failed to timely remit
upfront mortgage insurance premiums to HUD.
10. MCS Mortgage Bankers, Inc., Patchogue, New York [Docket No. 11-
1154-MR]
Action: On July 20, 2011, the Board entered into a Settlement
Agreement with MCS Mortgage Bankers, Inc. (``MCS'') that required MCS
to pay a civil money penalty in the amount of $23,500 and indemnify
HUD/FHA for any losses incurred on three HUD/FHA-insured loans, without
admitting fault or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: MCS disseminated a
misrepresentative advertisement to the public; failed to properly
analyze borrowers' credit in connection with two HUD/FHA-insured
mortgage loans; failed to resolve inconsistencies and/or discrepancies
when originating and/or underwriting a HUD/FHA-insured mortgage loan;
failed to ensure compliance with HUD's 203(k) program by failing to
demonstrate that the completed construction would meet FHA's minimum
property standards and/or comply with the local building code;
originated a HUD/FHA 203(k) mortgage on an ineligible property;
accepted and closed loans that were originated by individuals who were
not exclusively employed by MCS; and failed to properly verify rental
income by obtaining the required tax documentation.
11. Peoples Home Equity Inc., Brentwood, TN [Docket No. 10-2016-MR]
Action: On March 25, 2011, the Board entered into a Settlement
Agreement with Peoples Home Equity Inc. (``Peoples Home'') that
required Peoples Home to buy down the principal balance of a loan in
the amount of
[[Page 11151]]
$2,868; indemnify the Department on this loan for a period of five
years; and pay a civil money penalty in the amount of $7,500, without
admitting fault or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Peoples Home failed to comply
with HUD/FHA's rules prohibiting property flipping; failed to ensure
that the borrowers made the required minimum investment in the
property; originated a loan that exceeded the maximum insured mortgage
amount; and charged an impermissible tax service fee.
12. PHH Mortgage Corporation, Mount Laurel, NJ [Docket No. 10-1997-MR]
Action: On April 14, 2011, the Board entered into a Settlement
Agreement with PHH Mortgage Corp. (``PHH'') that required PHH to pay a
civil money penalty in the amount of $256,000, without admitting fault
or liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: PHH failed to timely remit
mortgage insurance premiums to HUD/FHA, and failed to notify HUD/FHA
within 15 calendar days of the termination of mortgage insurance
contracts.
13. Priority Bank, Ozark, AR [Docket No. 10-1795-MR]
Action: On February 14, 2011, the Board entered into a Settlement
Agreement with Priority Bank that required Priority Bank to pay a civil
money penalty in the amount of $50,000, without admitting fault or
liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Priority Bank failed to
maintain and implement a Quality Control Plan in accordance with HUD/
FHA's requirements, and paid compensation in the form of commissions to
an employee performing underwriting activities.
14. ResMac, Inc., Sunrise, FL [Docket No. 11-1126-MR]
Action: On April 15, 2011, the Board entered into a Settlement
Agreement with ResMac, Inc. (``ResMac'') that required ResMac to pay a
civil money penalty in the amount of $50,000, without admitting fault
or liability. In addition, ResMac was required to submit to HUD
restated financial statements for fiscal year ended December 31, 2009,
in which ResMac reclassified the net book value of all intangible
assets.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: ResMac misrepresented the
identity of its president on its January 2, 2009, application for FHA
approval; failed to timely notify HUD of a state regulatory sanction
imposed upon its president; and failed to submit an acceptable
Independent Public Accountant's Computation of Adjusted Net Worth for
the end of fiscal year 2009.
15. Universal Lending Corporation, Denver, CO [Docket No. 10-2003-MR]
Action: On April 14, 2011, the Board entered into a Settlement
Agreement with Universal Lending Corporation (``Universal'') that
required Universal to: indemnify HUD for any future losses on six FHA-
insured mortgage loans; reimburse HUD for losses in the amount of
$496,727.53 for mortgage insurance claims paid by HUD; and pay a civil
money penalty in the amount of $45,500, without admitting fault or
liability.
Cause: The Board took this action based on the following violations
of HUD/FHA requirements alleged by HUD: Universal improperly entered
incorrect information as ``cash reserves'' into HUD's automated
underwriting system in order to receive approvals for seven loans;
failed to adequately document the stability of borrowers' employment or
income and failed to adequately document other income used to qualify
borrowers; failed to consider mortgage payment debt and liabilities
when underwriting and approving FHA-insured loans; failed to adequately
document the source of gift funds for one loan; and failed to obtain
confirmation concerning cash saved at home with regard to two other
loans.
II. Lenders That Failed To Timely Meet Requirements for Annual
Recertification of HUD/FHA Approval and Have Cured
Action: The Board entered into settlement agreements with each of
the lenders listed below requiring each of the lenders to pay $3,500 in
civil money penalties, without admitting fault or liability.
Cause: The Board took this action because the lenders failed to
timely comply with HUD's annual recertification requirements, but
subsequently came into compliance.
1. American Homestar Mortgage, LLC, League City, TX [Docket No. 11-
1196-MR]
2. Merrill Lynch Mortgage Lending, Inc., New York, NY [Docket No.
11-1138-MRT]
3. Southpoint Financial Services, Inc., Alpharetta, GA [Docket No.
11-1197-MR]
4. United Bank, Charleston, WV [Docket No. 11-1141-MRT]
5. Wendover Financial Services Corporation, Chesterbrook, PA
[Docket No. 11-1198-MR]
6. World Alliance Financial Corp., Melville, NY [Docket No. 11-
1143-MRT]
Dated: February 16, 2012.
Carol J. Galante,
Acting Assistant Secretary for Housing, Federal Housing Commissioner.
[FR Doc. 2012-4328 Filed 2-23-12; 8:45 am]
BILLING CODE 4210-67-P
