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Notice

Credit Watch Termination Initiative

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AGENCY:

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

ACTION:

Notice.

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.

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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.

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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 42nd 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(s) 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 (1) those already underwritten and approved by a Direct Endorsement (DE) underwriter employed by an unconditionally approved DE lender and (2) 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 mortgagee or branch authorized to originate FHA insured mortgages in that area. 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 a new Origination Approval Agreement if the mortgagee continues to be an approved mortgagee meeting the requirements of 24 CFR 202.5, 202.6, 202.7, 202.8 or 202.10 and 202.12, if there has been no Origination Approval Agreement for at least six months, and if the Secretary determines that the underlying causes for termination have been remedied. To enable the Secretary to ascertain whether the underlying causes for termination have been remedied, a mortgagee applying for a new Origination Approval Agreement must obtain an independent review 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 review must be conducted and issued 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 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:

Mortgagee nameMortgagee branch addressHUD office jurisdictionsTermination effective dateHomeownership centers
1st Continental Mortgage, Inc2691 E. Oakland Park Blvd, Suite 203, Fort Lauderdale, FL 3306Orlando4/28/2010Atlanta
1st Continental Mortgage, Inc2691 E. Oakland Park Blvd, Suite 203, Fort Lauderdale, FL 3306Jacksonville4/28/2010Atlanta
1st Continental Mortgage, Inc2691 E. Oakland Park Blvd, Suite 203, Fort Lauderdale, FL 3306Birmingham4/28/2010Atlanta
Allied Home Mortgage Capital Corp6110 Pinemont Drive, Suite 215, Houston, TX 77092Newark4/9/2010Denver
Allied Home Mortgage Capital Corp6110 Pinemont Drive, Suite 215, Houston, TX 77092Washington, DC4/9/2010Philadelphia
Americare Investment Group, Inc. d/b/a Premier Capital Lending901 W. Bardin Road, Suite 200, Arlington, TX 76017Dallas2/18/2010Denver
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Ameristar Mortgage & Financial Services, Inc2468 Old Springville Road, Birmingham, AL 35215Birmingham4/9/2010Denver
Community West Mortgage, LLC3360 South Wadsworth Blvd., Lakewood, CO 80227Denver2/18/2010Denver
Consumers Real Estate Finance Company888 E. Las Olas Blvd., Suite 506, Ft. Lauderdale, FL 33301Cleveland11/4/2009Santa Ana
D and R Mortgage Corp. d/b/a Metro Finance29870 Middlebelt Road, Suite 100, Farmington Hills, MI 48334Flint4/9/2010Philadelphia
D and R Mortgage Corp. d/b/a Metro Finance29870 Middlebelt Road, Suite 100, Farmington Hills, MI 48334Grand Rapids4/9/2010Philadelphia
D and R Mortgage Corp. d/b/a Metro Finance29870 Middlebelt Road, Suite 100, Farmington Hills, MI 48334Detroit4/9/2010Philadelphia
D and R Mortgage Corp. d/b/a Metro Finance29870 Middlebelt Road, Suite 100, Farmington Hills, MI 48334Greensboro4/9/2010Atlanta
Dell Franklin Financial, LLC8334 Veterans Highway, Suite 1, Millersville, MD 21108Baltimore4/9/2010Philadelphia
Essential Mortgage, Inc1701 48th Street, Suite 110, West Des Moines, IA 50266Des Moines4/30/2010Denver
First Mortgage Corp3230 Fallow Field Drive, Diamond Bar, CA 91765Fresno2/18/2010Santa Ana
First Ohio Banc and Lending, Inc6100 Rockside Woods Blvd, Suite 1, Independence, OH 44313Richmond4/30/2010Philadelphia
Franklin First Financial, Ltd. d/b/a President First Mortgage Bankers445 Broadhollow Road, Suite 215, Melville, NY 11747Newark4/9/2010Philadelphia
Franklin First Financial, Ltd. d/b/a President First Mortgage Bankers445 Broadhollow Road, Suite 215, Melville, NY 11747Camden4/9/2010Philadelphia
Gateway Funding Diversified Mtg. SRVS LP300 Welsh Road, Building 5, Horsham, PA 19044Camden2/18/2010Philadelphia
Gold Star Home Mortgage, LLC3007 North Belt Highway, Suite K, Saint Joseph, MO 64506Kansas City2/18/2010Denver
Group Two Thousand Real Estate Services d/b/a Empire Financial8010 Haven Avenue, Rancho Cucamonga, CA 91730Santa Ana4/9/2010Santa Ana
Interlinc Mortgage, Inc19221 Interstate 45, Suite 210, Conroe, TX 77385San Antonio4/30/2010Denver
Jagle and Associates, LLC900 N. Federal Highway, Suite 240, Boca Raton, FL 33432Miami2/18/2010Atlanta
Loanmans Mortgage Store, LLC d/b/a Hamilton Lending602 S. Marina Drive, Gilbert, AZ 85233Omaha4/23/2010Denver
Morrison Capital Corporation, Inc251 S.W. Noel Street, Lees Summit, MO 64063Kansas City4/30/2010Denver
Neighborhood Funding, Inc8910 N. Dale Mabry Highway, Suite 18, Tampa, FL 33614Atlanta2/18/2010Atlanta
Newport Shores Mortgage, Inc1526 York Road, Lutherville Timonium, MD 21093Greensboro2/18/2010Atlanta
Paraiso, LLC5505 Roswell Road, NE., Suite 250, Atlanta, GA 30342Atlanta2/18/2010Atlanta
Pinnacle Mortgage Funding, LLC250 E. 96th, Suite 125, Indianapolis, IN 46240Indianapolis2/18/2010Denver
Premium Capital Funding, LLC d/b/a Topdot Mortgage125 Jericho Turnpike, Suite 400, Jericho, NY 11753-1030Jacksonville2/18/2010Atlanta
Premium Capital Funding, LLC d/b/a Topdot Mortgage125 Jericho Turnpike, Suite 400, Jericho, NY 11753-1030Atlanta2/18/2010Atlanta
Premium Capital Funding, LLC d/b/a Topdot Mortgage125 Jericho Turnpike, Suite 400, Jericho, NY 11753-1030Baltimore2/18/2010Philadelphia
Premium Capital Funding, LLC d/b/a Topdot Mortgage125 Jericho Turnpike, Suite 400, Jericho, NY 11753-1030Richmond2/18/2010Philadelphia
Republic State Mortgage2715 Bissonnet Street, Suite 102, Houston, TX 77005Dallas4/30/2010Denver
Tamayo Financial Services, Inc16123 La Grange Road, Orland Park, ILChicago4/30/2010Atlanta
The First Fidelity Mortgage Group d/b/a First Fidelity Mortgage9607 Belair Road, Baltimore, MD 21236Columbia2/18/2010Atlanta
The First Fidelity Mortgage Group d/b/a First Fidelity Mortgage9607 Belair Road, Baltimore, MD 21236Greensboro2/18/2010Atlanta
Weststar Mortgage Group2155 Louisiana Boulevard, NE., Albuquerque, NM 87110Dallas4/28/2010Denver
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Dated: July 30, 2010.

David H. Stevens,

Assistant Secretary for Housing—Federal Housing Commissioner.

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[FR Doc. 2010-20068 Filed 8-12-10; 8:45 am]

BILLING CODE 4210-67-P