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Notice

Mortgagee Review Board; Administrative Actions

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AGENCY:

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

ACTION:

Notice.

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.

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FOR FURTHER INFORMATION CONTACT:

D. Jackson Kinkaid, Secretary to the Mortgagee Review Board, 451 7th Street, SW, Washington, DC 20410, telephone: (202) 708-3041 extension 3574 (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).

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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, Public Law 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 January 1, 1998 through May 31, 2000.

1. AccuBanc Mortgage/Medallion Mortgage Company, Dallas, TX

Action: Proposed settlement agreement that would include the indemnification on loans in which violations of the HUD/FHA requirements and regulations occurred.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations. AccuBanc also reported to the Department a number of similar loans containing violations of HUD/FHA requirements.

2. Adana Mortgage Bankers, Inc., Atlanta, GA

Action: Proposed settlement agreement that would include the indemnification on up to six loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $1,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

3. Alliance Mortgage Banking, Massapequa, NY

Action: Proposed settlement agreement that would include the indemnification on up to twenty-six loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $25,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

4. Allstate Mortgage Company, Norwalk, CA

Action: Immediately and permanently withdrew the HUD/FHA approval.

Cause: Serious violations of HUD/FHA requirements and regulations that included the indictment and conviction of the president and other officers for mail fraud and money laundering.

5. Alpha America Financial, Inc., Costa Mesa, CA

Action: Proposed settlement agreement that would include the payment to the Department of a civil money penalty of $5,000.

Cause: An advertisement in a mortgage industry publication that invited other mortgagees to become affiliated with Alpha as net branches.

6. Ambassador Mortgage Corporation, Turnersville, NJ

Action: Proposed settlement agreement that would include the payment to the Department of a civil money penalty of $25,000; payment to the Department the amount of the over-insurance in two loans; and refund to mortgagors all unallowable fees. Start Printed Page 53731

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

7. Ameribanc Mortgage Corp., Mesa, AZ

Action: Proposed settlement agreement that would include the indemnification on fifteen loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $55,500.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

8. Amerifirst Mortgage Corporation, Hempstead, NY

Action: Proposed withdrawal of the HUD/FHA approval for a period of three years; and proposed payment to the Department of a civil money penalty of $100,000.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: submitting to HUD/FHA false/inaccurate HUD-1 Settlement Statements; failing to ensure that non-profit mortgagors met their required investment; failing to ensure that a mortgagor met the minimum required investment; submitting a delinquent loan for endorsement; using false income to qualify a mortgagor; originating 203k mortgages on ineligible properties; originating a loan using an incorrect Social Security Number; approving a mortgagor with a delinquent student loan; approving a refinance transaction for a mortgagor with delinquent credit; failing to accurately calculate the mortgagor's effective income; failing to verify a mortgagor's source of funds for closing; and using a false gift letter to document a mortgagor's source of funds.

9. Apollo Mortgage and Financial Services, Inc., St. Petersburg, FL

Action: Debarred Apollo Mortgage and Financial Services, Inc. for one year; the proposed payment to the Department of a civil money penalty of $40,000; and the recommending of debarment of principals for one year.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

10. ARC Financial Group, Inc., Marlton, NJ

Action: Proposed settlement agreement that would include the indemnification of up to seven loans in which violations of the HUD/FHA requirements and regulations occurred; refund all unallowable fees charged to borrowers on five loans originated during the last two years; perform monthly Quality Assurance reviews; and the payment to the Department of a civil money penalty of $30,500.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplements the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

11. Associates Mortgage Group, Inc., Louisville, KY

Action: Proposed settlement agreement that would include the indemnification of a loan in which violations of the HUD/FHA requirements and regulations occurred.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

12. Assurety Mortgage Group, Inc., Decatur, GA

Action: Withdrew the HUD/FHA approval for a period of three years; and the payment to the Department of a civil money penalty of $45,500.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: failed to report a violation of law or regulation, false statement or program abuse to the HUD field office or the Inspector General; used altered documents for loan approval; failed to document source of funds and misrepresented Title II program requirements to borrowers; allowed the borrower to hand carry the VOE and VOD; failed to document income used for loan approval; failed to document contributory value of labor; allowed debts to be omitted from the calculation of the debt to income ratios; approved loans that exceeded acceptable ratios without compensating factors; charged borrowers unallowable fees; failure to maintain complete origination files; failed to obtain acceptable documentation to verify income; failed to obtain the borrower's signature; failed to verify a Social Security Number (SSN); failed to maintain and implement a Quality Control Plan in compliance with HUD/FHA requirements and perform Quality Control reviews; and approved a loan without checking the Credit Alert Interactive Voice Response System (CAIVRS).

13. Bank of New York, New York, NY

Action: Considered the matter and took no action at this time.

Cause: Information received by HUD.

14. California Empire Financial Group, Inc., Rancho Cucamonga, CA

Action: Proposed settlement agreement that would include the indemnification on eight loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $22,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

15. Charter Mortgage Corporation, Ft. Lauderdale, FL

Action: Permanently withdrew the HUD/FHA approval.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: failing to remit Up Front Mortgage Insurance Premiums (UFMIPs) to HUD/FHA within 15 days of loan closing and to remit late charges and interest payments; failingre to submit loans for endorsement in a timely manner; failing to implement and maintain an adequate Quality Control Plan for the origination of HUD/FHA-insured mortgages; and using false and misleading advertising.

16. CHM Mortgage, LLC, El Segundo, CA

Action: Prior to being considered by the Board, CHM voluntarily withdrew its HUD/FHA approval. The Board voted to extend CHM's period of withdrawal to a period of three years; and the payment to the Department of a civil money penalty of $8,500.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: Failure to review the governmentwide list of debarred, suspended and excluded parties and HUD's limited denial of participation list; failure to implement and maintain an adequate Quality Control Plan for the origination of HUD/FHA-insured mortgages; and failure to comply with HUD/FHA's annual loan origination reporting requirements which supplements the requirements of the Home Mortgage Disclosure Act.

17. Community Family Mortgage, Inc., Atlanta, GA

Action: Proposed settlement agreement that would include the payment to the Department of a civil money penalty of $6,500; submit to the Start Printed Page 53732Department all Home Mortgage Disclosure Act data since 1993; and for the previous two calendar years, audit its HUD/FHA activity and refund all unallowable fees charged mortgagors.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplements the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

18. Community Home Mortgage Corporation, Melville, NY

Action: Proposed settlement agreement that would include the indemnification on up to eighteen loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $120,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplements the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

19. Countrywide Home Loans, Inc., Calbasas, CA

Action: Proposed settlement agreement that would include the indemnification on up to five loans in which violations of the HUD/FHA requirements and regulations occurred; enhance its Quality Control Plan; and the payment to the Department of $30,000.

Cause: A review by HUD's Quality Assurance Division's contractor discovered failures to comply with HUD/FHA Loss Mitigation requirements and other serious violations of HUD/FHA's servicing requirements and regulations.

20. County Mortgage Company, Inc., West Caldwell, NJ

Action: Proposed settlement agreement that would include the indemnification on up to eleven loans in which violations of the HUD/FHA requirements and regulations occurred; the requirement of County Mortgage Company, Inc. to enhance its Quality Control Program; the payment to the Department of a civil money penalty of $25,000; and the requirement that its underwriters obtain additional training in underwriting HUD/FHA-insured mortgages.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

21. DiverseAmerican Mortgage Company, East Greenwich, RI

Action: Permanently withdrew the HUD/FHA approval; and the payment to the Department of a civil money penalty of $250,000.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: failing to remit Up-Front Mortgage Insurance Premiums (UFMIP) to HUD/FHA; and failing to remit UFMIP to HUD/FHA in a timely manner.

22. Eagle Home Loans and Realty, Inc., Sacramento, CA

Action: Proposed settlement agreement that would include the indemnification on two loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $1,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplements the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

23. Empire Funding Corporation, Austin, TX

Action: Proposed the withdrawal of HUD/FHA approval for a three year period; and the payment to the Department of a civil money penalty of $60,500. This action occurred as the result of the Department's inability to finalize a settlement agreement with Empire proposed at the February 18, 1999 Mortgagee Review Board meeting.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: failure to re-approve two dealers in a timely manner and funding ten Title I loans from non-approved dealers; and failure to ensure that detailed descriptions of the proposed improvements for five loans were provided by the borrowers.

24. Executive Funding Services, Camp Springs, MD

Action: Proposed a settlement agreement that would include requiring Executive Funding Services to buydown two overinsured loans; the indemnification on eight loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $10,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplements the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

25. Express National Mortgage, Norwalk, CA

Action: Proposed settlement agreement that would include the indemnification on up to six loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $16,500.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplements the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

26. Federal Home Mortgage Corporation, Columbus, OH

Action: Proposed settlement agreement that would include Federal Home Mortgage Corporation agreeing to change its name to comply with the provisions of Title 18 United States Code Section 709 and the payment to the Department of a civil money penalty of $5,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplements the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

27. Fidelity Home Mortgage Corporation, Timonium, MD

Action: Proposed settlement agreement that would include the indemnification on up to eight loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $27,500.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplements the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

28. Financial Mortgage Corporation, Ft. Washington, PA

Action: Proposed settlement agreement that would include the indemnification on one loan in which violations of the HUD/FHA requirements and regulations occurred; Start Printed Page 53733and the payment to the Department of a civil money penalty of $1,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

29. Financial Research Services, Inc., Miami, FL

Action: Withdrew the HUD/FHA approval for a period of ten years and the payment to the Department of a civil money penalty of $75,000.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: failure to remit loan pay-off funds to holders of GNMA mortgage-backed securities; submission of false certifications and documentation to secure late endorsement on defaulted loans; failure to properly account for and disburse 203(k) escrow funds; failure to conduct quality control reviews; failure to properly originate 203(h) loans; failure to properly calculate effective income; failure to verify the source of the mortgagors' funds to close; failure to initiate early contact with delinquent borrowers; failure to use realistic repayment plans for defaulted mortgages; failure to conduct an acceptable Management Review prior to approving foreclosure; misuse of borrower escrow funds; and failure to retain records.

30. First Mortgage of Indiana, Indianapolis, IN

Action: Proposed a settlement agreement that would include the indemnification on up to six loans in which violations of the HUD/FHA requirements and regulations occurred; perform an audit, by an independent CPA, of all HUD/FHA-insured mortgages originated by First Mortgage of Indiana during the last two years; refund all unallowable fees charged mortgagors; and the payment to the Department of a civil money penalty of $5,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplements the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

31. First United Mortgage Company, Kenilworth, NJ

Action: Proposed settlement agreement that would include the indemnification on up to three loans in which violations of the HUD/FHA requirements and regulations occurred; audit the past four years of origination activity; refund all improperly collected fees; submit to the Department a proper Quality Control Plan; and the payment to the Department of a civil money penalty of $50,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplements the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

32. GAMA Mortgage Corporation, New Orleans, LA

Action: Proposed settlement agreement that would include the payment to the Department of a civil money penalty of $1,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplements the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

33. Gateway Funding Diversified Mortgage Services, Conshohocken, PA

Action: Proposed settlement agreement that would include the review and refund of all improper commitment fees charged mortgagors over the last two years; buydown the mortgage amounts in two loans; submit its quality control results to the Department quarterly over the next twelve months; and the payment to the Department of a civil money penalty of $25,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

34. The GM Group Inc., Richardson, TX

Action: Withdrew the HUD/FHA approval for a period of three years; payment to the Department of a civil money penalty of $700,000; and recommended that principals be considered for debarment.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: failing to submit Upfront Mortgage Insurance Premiums (MIP) to HUD in a timely manner; using MIP and escrow funds for operating cash needs; submitting loans for endorsement that did not comply with the late endorsement requirements; and submitting a loan to HUD where the two-year work history was not properly supported and with apparent falsified documentation.

35. Golden Empire Mortgage, Inc., Bakersfield, CA

Action: Proposed settlement agreement that would include the indemnification on up to thirty-one loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $30,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

36. Greystone Servicing Corporation, New York, NY

Action: Considered the matter and decided to take no further action.

Cause: A review by HUD's Quality Assurance Division and Office of Inspector General.

37. Heartland Mortgage, Inc., Tucson, AZ

Action: Proposed settlement agreement that would include the indemnification on one loan in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $5,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplements the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

38. Hollywood Mortgage, Inc., Palmdale, CA

Action: Proposed withdrawal of the HUD/FHA approval for a period of three years; and the proposed payment to the Department of a civil money penalty of $28,600. This action resulted from the Department's inability to finalize a settlement agreement proposed at the October 21, 1999 Mortgagee Review Board meeting.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: falsely certified to information in the loan files; used false documentation in the origination of mortgage loans; failed to implement and maintain a Quality Control Plan; failed to comply with HUD/FHA's annual loan origination reporting requirements which supplement the requirements of the Home Mortgage Disclosure Act; operated as a real estate office using its office space and staff; and allowed employees to engage in business Start Printed Page 53734practices which were, or gave the appearance of, a conflict of interest.

39. Homeowners Mortgage and Equity, Inc., Austin, TX

Action: Proposed settlement agreement that would include the indemnification on three loans in which violations of the HUD/FHA requirements and regulations occurred.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

40. Home Savings of America FSB, Irwindale, CA

Action: Proposed settlement agreement that would include the indemnification on up to six loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $20,000.

Cause: A review by HUD's Quality Assurance Division's contractor discovered violations of HUD/FHA's Loss Mitigation requirements as well as other serious violations of HUD/FHA servicing requirements and regulations.

41. HomeSide Lending, Inc., Jacksonville, FL

Action: Proposed settlement agreement that would include a requirement of HomeSide Lending, Inc. to pay the Department $20,000 to cover the Department's investigative expenses; and a requirement to provide mortgagors with more detailed escrow statements that clearly itemize and separately identify all charges.

Cause: Information on serious violations of HUD/FHA requirements and regulations received from HUD's Real Estate Settlement Procedures Act Enforcement Division.

42. Irwin Mortgage Corp., Indianapolis, IN

Action: Proposed settlement agreement that would include the indemnification on sixteen loans in which violations of the HUD/FHA requirements and regulations occurred.

Cause: A review by HUD's Office of Inspector General discovered serious violations of HUD/FHA requirements and regulations.

43. Island Mortgage Network, Inc.; Melville, NY

Action: Immediately withdrew the HUD/FHA approval in the Buffalo and Albany HUD Office jurisdictions for a period of three years; and the payment to the Department of a civil money penalty of $66,000.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: use of appraisals with incomplete or incorrect information; using falsified documentation or conflicting information to approve HUD/FHA mortgagors; failing to ensure that borrowers met their minimum required investment; approving loans where origination documents passed through the hands of an interested third party; failing to properly verify the source and adequacy of funds for the down payment and/or closing; charging fees which are not in compliance with the HUD/FHA guidelines; failing to provide loan origination documents for review by HUD/FHA; failing to properly display the required FHEO poster; failing to maintain an adequate Quality Control Plan; and submitting loans originated by non-HUD/FHA approved mortgage brokers.

44. James B. Nutter & Company, Kansas City, MO

Action: Proposed settlement agreement that would include the indemnification on loans in which violations of the HUD/FHA's Loss Mitigation and other servicing requirements and regulations occurred; and the payment to the Department of $145,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA Loss Mitigation requirements and other serious violations of HUD/FHA requirements and regulations.

45. J. P. Mortgage Company, North Miami, FL

Action: Withdrew the HUD/FHA approval for a period of three years; and the payment to the Department of a civil money penalty of $75,000.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: failing to comply with HUD/FHA's annual loan origination reporting requirements which supplement the requirements of the Home Mortgage Disclosure Act; failing to monitor overages to ensure they are not being applied in a manner that would violate the Fair Housing Act or the Equal Credit Opportunity Act; failing to establish and implement a quality control plan for the origination of HUD/FHA-insured mortgages; using deceptive or misleading advertising to solicit applicants for Title I loans; using false information to originate HUD/FHA-insured mortgages; permitting the hand-carrying of a Verification of Employment; failing to address discrepancies in documents used to originate HUD/FHA-insured mortgages; failing to ensure that borrowers met their minimum required investment; and failing to satisfy Direct Endorsement underwriter documentation requirements prior to loan closing.

46. J & R Mortgage, Inc., San Mateo, CA

Action: Proposed settlement agreement that would include the indemnification on up to nine loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $25,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

47. Legend Mortgage Company, Lisle, IL

Action: Proposed settlement agreement that would include the indemnification on one loan in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $11,000.

Cause: An audit by HUD's Office of Inspector General discovered serious violations of HUD/FHA requirements and regulations.

48. Liberty Mortgage Corporation, Birmingham, AL

Action: Proposed settlement agreement that would include a requirement of Liberty Mortgage Corporation to more closely monitor its Quality Control Plan; and the payment to the Department of a civil money penalty of $1,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplement the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

49. Madison Home Equities, Inc., Carle Place, NY

Action: Immediately withdrew the HUD/FHA approval for five years; and the payment to the Department of a civil money penalty of $71,500.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: used false certifications on loans regarding its financial interest/relationship to sellers; approved loans where the verification forms passed through the hands of an interested third party; used false documentation or conflicting information to originate loans and Start Printed Page 53735obtain HUD/FHA mortgage insurance; approved mortgage loans where the ratios exceeded HUD/FHA guidelines; failed to document the borrower's source of funds used for downpayment or closing costs; failed to adhere to the credit requirements on mortgage loans; failed to ensure that a borrower met the requirements to purchase a three unit property; failed to properly document irregularities between the appraisal report and the sales contract; and failed to ensure appraisals met the requirements of HUD/FHA.

50. Major Mortgage Corporation, Livonia, MI

Action: Proposed settlement agreement that would include the indemnification on up to fifteen loans in which violations of HUD/FHA requirements and regulations occurred.

Cause: An audit by HUD's Office of Inspector General discovered serious violations of HUD/FHA requirements and regulations.

51. Malone Mortgage Company America, LTD, Carlsbad, CA

Action: Proposed settlement agreement that would include the indemnification on up to one hundred and thirty-nine loans in which violations of the HUD/FHA requirements and regulations occurred; demonstrate Quality Control improvements; perform an audit, by an independent CPA, of all HUD/FHA-insured mortgages originated during the last two years; refund all unallowable fees charged mortgagors; and the payment to the Department of a civil money penalty of $100,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

52. Mical Mortgage Corporation/FINET Holdings Corporation, San Diego, CA

Action: Withdrew the HUD/FHA approval for a period of three years (this extended by two years a prior one year withdrawal action taken by the Department due to failure to submit acceptable financial statements; and the payment to the Department of a civil money penalty of $500,000.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: failing to remit Up-Front Mortgage Insurance Premiums (UFMIP) to HUD/FHA within 15 days from the date of loan closing and to remit late charges and interest penalties; failing to submit loans for endorsement in a timely manner; failing to respond to its own quality control procedures; failing to reporting business changes to HUD/FHA; and failing to have a senior corporate officer designated to conduct exclusively its affairs.

53. Mitchell Financial Services, Inc., Tucson, AZ

Action: Proposed settlement agreement that would include the payment to the Department of a civil money penalty of $15,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

54. ML Pacific Investment Capital d.b.a. Pacific Investment Capital , Anaheim, CA

Action: Withdrew the HUD/FHA approval for a period of three years; and the payment to the Department of a civil money penalty of $40,000.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: failing to implement a Quality Control Plan; failing to ensure adequate face-to-face or telephone interviews were conducted with borrowers; utilizing false information and documentation to originate Title I loans; and permitting strawbuyers to qualify for Title I loans.

55. Molton, Allen & Williams Corporation, Birmingham, AL

Action: Proposed settlement agreement that would include the indemnification on up to twenty-nine loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $20,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA Loss Mitigation requirements and other serious violations of HUD/FHA requirements and regulations.

56. Mortgage Acceptance Corporation, Floral Park, NY

Action: Proposed withdrawal of the HUD/FHA approval for a period of three years and the proposed payment to the Department of a civil money penalty of $75,000.

Cause: A review by HUD's Quality Assurance Division discovered these serious violations of HUD/FHA requirements and regulations: failing to comply with HUD/FHA's annual loan origination reporting requirements which supplement the requirements of the Home Mortgage Disclosure Act; failing to provide loan origination files and documents for review; using falsified or conflicting information in originating FHA insured loans; failing to ensure that mortgagors have met their minimum required investment because the loan exceeded HUD's maximum allowable mortgage amount; failing to conduct a face-to-face or adequate interview with first-time homebuyers; sharing office space with NRER Realty and commingling employees; and failing to implement and maintain an adequate Quality Control Plan.

57. Mortgage by Design, Inc., Brooklyn Park, MN

Action: Proposed settlement agreement that would include the indemnification on up to five loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $2,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

58. Mortgage Co-Op, Inc., Metairie, LA

Action: Proposed settlement agreement that would include the indemnification on three loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $4,000.

Cause: A review by HUD's Quality Assurance Division and a referral from the Department's Denver Homeownership Center's Processing and Underwriting Division disclosed serious violations of HUD/FHA requirements and regulations.

59. Mortgage Mart, Inc., Blue Bell, PA

Action: Payment to the Department of a civil money penalty of $2,500.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplement the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

60. Mortgage Money Center, Carle Place, NY

Action: Proposed settlement agreement that would include the indemnification on up to seven loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $25,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations. Start Printed Page 53736

61. National Charter Mortgage Corporation, Gardena, CA

Action: Proposed settlement agreement that would include adherence to its Quality Control Plan; perform quarterly audits of its payments of Mortgage Insurance Premiums; and the payment to the Department of a civil money penalty of $53,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplement the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

62. Nationsbanc Mortgage Corporation, Charlotte, NC

Action: Proposed settlement agreement that would include the indemnification on up to six loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $29,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

63. Newport Shores Financial, Inc., Aliso Viejo, CA

Action: Proposed settlement agreement that would include a requirement of Newport Shores Financial, Inc. to submit periodic reports to the Department on the operation of its branch offices; and the payment to the Department of a civil money penalty of $25,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

64. Norwest Mortgage, Inc., Des Moines, IA

Action: Proposed settlement agreement that would include the payment to the Department of a civil money penalty of $75,000; and the payment to the Department for the losses suffered, including interest, from Norwest Mortgage, Inc's submission of insurance claims on 39 loans that were subject to a 1996 settlement agreement.

Cause: Failure to comply with a Settlement Agreement entered into with the Mortgagee Review Board.

65. Norwest Mortgage, Inc., Seattle, WA

Action: Proposed settlement agreement that would include the indemnification on twelve loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $50,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

66. Pacific Charter Mortgage Corporation, Los Alamitos, CA

Action: Proposed settlement agreement that would include the requirement of Pacific Charter Mortgage Corporation to monitor its payment of Mortgage Insurance Premiums to ensure all payments are made timely; the indemnification on up to ten loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $100,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

67. Pierucci, Inc. d.b.a. Sunset Mortgage Company, Chadds Ford, PA

Action: Proposed settlement agreement that would include the payment to the Department of a civil money penalty of $5,000; and the agreement of Sunset Mortgage Company to comply with all HUD/FHA requirements and regulations in the future.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

68. Popular Mortgage, Inc. d.b.a. Puerto Rico Home Mortgage, Hato Rey, PR

Action: Proposed settlement agreement that would include the indemnification on up to fifty-four loans in which violations of the HUD/FHA requirements and regulations occurred.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

69. Professional Mortgage Banker's Corporation, Westbury, NY

Action: Proposed settlement agreement that would include the indemnification on up to nine loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $10,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

70. Rhode Island Housing and Mortgage Finance Corporation, Providence, RI

Action: Proposed settlement agreement that would include the payment to the Department of a civil money penalty of $16,500. This action revised a settlement agreement proposed at the February 18, 1999 Mortgagee Review Board meeting.

Cause: A review by HUD's Quality Assurance Division's contractor discovered serious violations of HUD/FHA requirements and regulations.

71. Rockwell Equities, Inc., Jericho, NY

Action: Permanently withdrew the HUD/FHA approval; and proposed the payment to the Department of a civil money penalty of $11,000.

Cause: Failing to comply with the indemnification agreement previously negotiated with HUD's Quality Assurance Division.

72. Ryland Mortgage Company, Columbia, MD

Action: Proposed settlement agreement designed to protect the Department during the period between the indictment of Ryland Mortgage Company and trial. The settlement agreement includes probation until the case was resolved at trial; five year indemnification on all FHA loans originated during the period Ryland was indicted until sixty days after ultimate resolution of the case; loans originated during this period must be sold “servicing released on the secondary market;” and increased auditing of Ryland's HUD/FHA-insured loans during this period. The Mortgagee Review Board considered the matter again after Ryland Mortgage Company pleaded guilty and decided to take no further action.

Cause: Indictment and conviction of Ryland Mortgage Company and certain senior officers.

73. Summit Mortgage Corporation, Houston, TX

Action: Proposed settlement agreement that would include the indemnification on up to twenty-nine loans in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $75,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

74. SunTrust Mortgage, Inc., Atlanta, GA

Action: Proposed settlement agreement that would include the indemnification on up to eighteen loans in which violations of the HUD/FHA requirements and regulations occurred; Start Printed Page 53737and the payment to the Department of a civil money penalty of $54,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA Loss Mitigation requirements and other serious violations of HUD/FHA requirements and regulations.

75. Twins, Inc., Columbia, SC

Action: Proposed settlement agreement that would include the refunding of all unallowable fees to mortgagors; and the payment to the Department of a civil money penalty of $8,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

76. Unicor Funding, Inc., Mission Viejo, CA

Action: Proposed settlement agreement that would include the indemnification on up to twenty-one loans in which violations of the HUD/FHA requirements and regulations occurred; the payment to the Department of a civil money penalty of $42,000; and submit an audit of its compliance with the Title I requirements to the Department after six months.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

77. United Southern Mortgage Corporation of Roanoke, Virginia Beach, VA

Action: Withdrew the HUD/FHA approval for a period of three years; and the payment to the Department of a civil money penalty of $250,000.

Cause: A review by HUD's Quality Assurance Division discovered the failure to remit the Up-Front Mortgage Insurance Premiums (UFMIP) on sixty-two loans to HUD/FHA within fifteen days after loan closing.

78. Washington Mutual Bank, Seattle, WA

Action: Proposed settlement agreement that would include the indemnification on up to ten loans in which violations of the HUD/FHA requirements and regulations occurred; the payment to the Department of a civil money penalty of $25,000; and the submission to the Department of a plan explaining how Washington Mutual Bank will bring its servicing operation into compliance with the Department's Loss Mitigation requirements.

Cause: A review by HUD's Quality Assurance Division's contractor discovered failures to comply with HUD/FHA Loss Mitigation requirements and other serious violations of HUD/FHA requirements and regulations.

79. West Coast Mortgage Securities, Inc., San Diego, CA

Action: Proposed settlement agreement that would include the indemnification on one loan in which violations of the HUD/FHA requirements and regulations occurred; and the payment to the Department of a civil money penalty of $1,000.

Cause: A review by HUD's Quality Assurance Division discovered failures to comply with HUD/FHA's annual loan origination reporting requirements which supplement the requirements of the Home Mortgage Disclosure Act and other serious violations of HUD/FHA requirements and regulations.

80. Whitehall Funding, Inc., Indianapolis, IN

Action: Proposed settlement agreement that would include the payment to the Department of a civil money penalty of $10,000.

Cause: A review by HUD's Quality Assurance Division discovered serious violations of HUD/FHA requirements and regulations.

Start Signature

Dated: August 29, 2000.

William C. Apgar,

Assistant Secretary for Housing—Federal, Housing Commissioner, Chairman, Mortgagee Review Board.

End Signature End Supplemental Information

[FR Doc. 00-22600 Filed 9-1-00; 8:45 am]

BILLING CODE 4210-27-P