FHA Approvals Withdrawn & Suspended for Unscrupulous Lending Practices

admin —  January 26, 2010 — 5 Comments

Strategic Mortgage Corporation (Strategic), ProMortgage Inc., and Americare Investment Group Inc. (doing business as Premier Capital Lending) have had their FHA approvals withdrawn, and Home Mortgage, Inc. (HMI), Burr Ridge, Illinois, has had its FHA approval suspended.

The withdrawal actions will permanently prevent Strategic, ProMortgage and Americare from participating in FHA programs while the suspension of HMI will apply for a minimum of six months or until a federal court rules in a related matter.

The Federal Housing Administration’s Mortgagee Review Board (MRB) took these actions based upon the following serious violations of FHA requirements:

Strategic failed to comply with employment requirements, charged borrowers impermissible or excessive fees, failed to disclose all fees on the Good Faith Estimates, and submitted a false certification to HUD in connection with an application for FHA insurance. The MRB also voted to seek civil a monetary penalty from Strategic in the amount of $71,000.

ProMortgage failed to adopt and maintain a Quality Control Plan, failed to perform Quality Control reviews of loans that went into default within six months after closing, engaged in a prohibited branch arrangement, made false certifications on the HUD/VA Addendum to the Uniform Residential Loan Application (URLA), failed to comply with home office operation requirements, and failed to report employee compensation on the appropriate form. In addition, the Company allowed borrowers to provide verification of employment directly to the lender which creates an opportunity for manipulation or falsification of documents submitted. Verification of employment must be submitted directly to the lender by the employer. The MRB also voted to seek a monetary penalty from ProMortgage in the amount of $124,000.

Americare breached the terms of a settlement with HUD by failing to make any of the required monthly payments. On October 8, 2009, the Board entered into a settlement with Americare requiring the Company to pay of a monetary penalty of $124,000 and placing it on probation for a period of six months. Since then, Americare failed to make a single monthly payment as required under the terms of the earlier agreement.

HMI retained its part owner and Chief Executive Officer despite his indictment and subsequent guilty plea for bank fraud. In June 2009, HMI’s part owner and CEO was indicted in the U.S. District Court for the Northern District of Illinois, Eastern Division for his role in a scheme to obtain money for 450 fictitious residential mortgage loans; a guilty plea was entered in this matter on January 15, 2010. HMI failed to notify HUD of this indictment as required. Additionally, HMIfailed to comply with FHA’s annual recertification requirements.

In addition to these sanctions, the Mortgagee Review Board also took action against the following lenders:

Action Mortgage Corporation, Cranston, Rhode Island was placed on probation for a period of six months due to its misleading advertising practices. The Mortgagee Review Board also voted to impose a monetary penalty in the amount of $7,000.

Cooper and Shein, LLC (doing business as Great Oak Lending Partners), Timonium, Maryland was placed on probation for a period of six months due to its misleading advertising practices. The Mortgagee Review Board also voted to impose a monetary penalty in the amount of $11,000.

FHA takes its oversight role very seriously and will move swiftly and decisively to protect borrowers from unscrupulous lenders,” said FHA Commissioner David Stevens. “Any lender who refuses to comply with FHA requirements will simply no longer enjoy the privilege of participating in FHA programs.”

While these lenders may appeal the Board sanctions by submitting a written request for a hearing before an Administrative Law Judge within 30 days, the filing of an appeal does not delay these actions. Complaints seeking these civil money penalties will be served upon Strategic, ProMortgage, Action Mortgage, and Cooper and Shein, in due course and the lenders will have the opportunity to contest the imposition of the penalties before an Administrative Law Judge.

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5 responses to FHA Approvals Withdrawn & Suspended for Unscrupulous Lending Practices

  1. I had purchased a home in August 2007,Our Lender was Lend America(which we all know the GOVERMENT shut them down)and I received a FHA Loan.I paid for the appraisel and it was never finished(didn’t find out till a year later).And I never had a inspection done on home.(which My Real Estate agent said i didn’t need one.)So as far as I see it,FHA didn’t do their job and the Bank (wells Fargo that bought our loan from Lend America) didn’t do theirs.My Real Estate agent got away with frauntlent activity as these Banks also did.So who is fighting for me,no one,WHY ? Cause I don’t have the money to pay for a lawyer !! So where is my help for this ?

  2. I believe ive been scammed by premier capital lending services and i dont know what to do.My bank account has a o balance now an my children and i ill be homelss because of these rotten people. I would love to find a way to protect other familys from these horrible heartlss people any help and or answers????

  3. Its amazing that Pro Mortgage didn’t get in trouble before now. Someone should also look into Pro Mortgage Associates, his ex business partner!

  4. It’s a good start but FHA needs to get a lot tougher on these lenders.

  5. That is all good…but I know of lenders who are FHA approved who are currently doing loans that have corporations that havent existed for almost a year and have no license in states that HUD has approved them for…HUD is sadly lagging in catching companies…4 is a drop in the bucket…

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