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FHA’s Mortgagee Review Board Cracks Down on Hundreds of Lenders
Posted By Brittany Dunn On July 27, 2010 @ 3:05 pm In Government | No Comments
The ""Federal Housing Administration's"":http://portal.hud.gov/portal/page/portal/HUD/federal_housing_administration (FHA's) ""Mortgagee Review Board"":http://www.hud.gov/offices/hsg/sfh/mrb/mrbabout.cfm (MRB) is ruling with an iron fist.[IMAGE]
So far this year, the MRB has taken action against almost 1,500 FHA-approved lenders who failed to meet its requirements, according to a ""notice published Monday in the Federal Register."":http://frwebgate1.access.gpo.gov/cgi-bin/PDFgate.cgi?WAISdocID=Rsc0ui/5/2/0&WAISaction=retrieve These actions included reprimands, probations, suspensions, withdrawals of approval, and civil money penalties.
""Lenders should know by now that FHA will not tolerate fraudulent or predatory lending practices,"" said David Stevens, FHA commissioner. ""Any FHA-approved lender that does business with us must follow our standards. If we determine that our partners are not playing by the rules, we will take action - it's that simple.""
Of the nearly 1,500 lenders facing penalties from the MRB, 905 have lost FHA approval for a period of one year. The board said it voted to immediately withdraw its approval[COLUMN_BREAK]
because these lenders were not in compliance with the department's annual recertification requirements.
An additional 147 lenders were said to have failed to timely meet requirements for annual recertification of HUD/FHA approval, but are now in compliance. The board voted to give these lenders an opportunity to settle the matter by paying a $3,500 civil money penalty without admitting fault or liability.
The MRB also announced various settlement agreements, including one with CitiMortgage, Inc. According to the notice published in the Federal Register, the board entered into a settlement agreement requiring Citi to pay a $700,000 administrative payment to HUD without admitting fault or liability.
This action was taken based on various violations of HUD/FHA requirements. Citi allegedly failed to report all delinquent loans to HUD no later than the fifth business day of the following month, and the lender was accused of failing to correct Ã¢â‚¬Å“fatal errorsÃ¢â‚¬Â that resulted from its monthly reporting to HUDÃ¢â‚¬â„¢s single family default monitoring system. Additionally, the MRB said Citi failed to comply with HUDÃ¢â‚¬â„¢s/FHAÃ¢â‚¬â„¢s default servicing reporting requirements when it failed to timely submit a default servicing report, and the lender purportedly failed to fully implement its quality control for oversight over this functional area.
The HUD Reform Act of 1989 established the MRB. The boardÃ¢â‚¬â„¢s primary purpose is to monitor FHA-approved lenders for violations of the agency's program requirements.
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