Wednesday, January 27, 2010

G to the ame Over

The FHA continued its crackdown of approved mortgage lenders today, withdrawing three from the program and suspending another.

FHA approval was withdrawn for:

- Strategic Mortgage Corporation (Strategic)
- ProMortgage Inc.
- Americare Investment Group Inc. (dba Premier Capital Lending and TopDot Mortgage)

Additionally, the FHA Mortgagee Review Board (MRB) suspended the FHA approval of Home Mortgage, Inc. (HMI) of Burr Ridge, Illinois.

Offenses ranged from charging borrowers excessive fees to making false certifications to keeping owners in place that were accused of bank fraud.

ProMortgage allowed borrowers to submit verification of employment directly to the lender, which is a huge no-no, as it pretty much allows you to manipulate and falsify documents.

Just another day in the mortgage industry, really…

“FHA takes its oversight role very seriously and will move swiftly and decisively to protect borrowers from unscrupulous lenders,” said FHA Commissioner David Stevens, in a statement.

“Any lender who refuses to comply with FHA requirements will simply no longer enjoy the privilege of participating in FHA programs.”

And by enjoy, he means exist, because most of these lenders rely on the origination of FHA loans to stay in business.

Two other lenders, Action Mortgage Corp. of Cranston, Rhode Island and Cooper and Shein, LLC (dba Great Oak Lending Partners) of Timonium, Maryland, were placed on probation for a period of six months for misleading advertising.

Look for continued enforcement as the FHA works to protect its dwindling insurance fund.