Three FHA Lenders Suspended by HUD for Violations
- Jun 10, 2009
Washington, D.C.–The U.S. Department of Housing and Urban Development’s Mortgagee Review Board has suspended three lenders based on evidence of serious violations under HUD’s regulations. The three lenders are Golden First Mortgage Corp of Great Neck, N.Y., Great Country Mortgage Bankers, Inc. of Coral Gables, Fla. and Beneficial Mortgage Corporation of San Juan, P.R. They are now prohibited from originating new FHA-insured mortgages pending completion of HUD’s investigation into their lending practices.The Board found that Golden First Mortgage (GFM) failed to notify HUD/FHA of an investigation by the Office of Thrift Supervision (OTS) into the business activities of the company’s president, including his involvement in a civil money penalty with OTS. Great Country Mortgage Bankers, Inc. (GCMB) was suspended as a result of evidence compiled by HUD that the lender violated multiple HUD/FHA requirements, including failure to implement a required quality control plan; failure to ensure that employees worked exclusively for GCMB; failure to disclose business affiliations between GCMB and real estate and title service providers; and failure to properly verify key credit information in 55 FHA mortgage loans reviewed by HUD.The Beneficial Mortgage Corp. (Beneficial) failed to notify HUD/FHA of an investigation and sanctions imposed by the Puerto Rico Financial Institutions Commissioner’s Office (OCIF) related to mortgage servicing practices. OCIF’s actions included revoking Beneficial’s license or authorization to originate mortgages in Puerto Rico. HUD is investigating the business practices of the three lenders. In taking these actions, the Board determined that due to the serious nature of each violation and the inherent risk to the Department and the public, the suspensions were necessary to protect the financial soundness of FHA’s insurance fund. President Obama recently signed the Helping Families Save Their Homes Act that grants FHA more authority to keep bad actors out of the FHA programs and provided additional enforcement tools to police those lenders who employ false or misleading marketing tactics.