68 FR 178 pgs. 53990-53992 - Credit Watch Termination Initiative
Type: NOTICEVolume: 68Number: 178Pages: 53990 - 53992
Docket number: [Docket No. FR-4513-N-13]
FR document: [FR Doc. 03-23329 Filed 9-12-03; 8:45 am]
Agency: Housing and Urban Development Department
Official PDF Version: PDF Version
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-4513-N-13]
Credit Watch Termination Initiative
AGENCY:
Office of 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 the Department of Housing and Urban Development's (HUD) Federal Housing Administration against HUD-approved mortgagees through its Credit Watch Termination Initiative. This notice includes a list of mortgagees which have had their Origination Approval Agreements (Agreements) terminated.
FOR FURTHER INFORMATION CONTACT:
The Quality Assurance Division, Office of Housing, Department of Housing and Urban Development, 451 Seventh St., SW., Room B133-P3214, Washington, DC 20410; telephone (202) 708-2830 (this is not a toll free number). Persons with hearing or speech impairments may access that number via TTY by calling the Federal Information Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION:
HUD has the authority to address deficiencies in the performance of lenders' loans as provided in the HUD mortgagee approval regulations at 24 CFR 202.3. On May 17, 1999 (64 FR 26769), HUD published a notice 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 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 fifteenth review period, HUD is only terminating the Agreement of mortgagees whose default and claim rate exceeds both the national rate and 250 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 set forth by the General Accounting 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 or by courier to 490 L'Enfant Plaza, East, SW., Suite 3214, Washington, DC 20024.
Action: The following mortgagees have had their Agreements terminated by HUD:
| Mortgagee name | Mortgagee branch address | HUD office jurisdictions | Termination effective date | Home ownership centers |
|---|---|---|---|---|
| American Home Mortgage Company | 951 Eastgate Loop Ste. 1300 Chattanooga, TN 37411 | Knoxville, TN | 06/23/2003 | Atlanta |
| American Mortgage Service, Inc | 8086 Highway 51 North Millington, TN 38053 | Memphis, TN | 06/23/2003 | Atlanta |
| Approved Mortgage Corp | 107 N. State Rd. 135, Ste. 301 Greenwood, IN 46142 | Indianapolis, IN | 06/23/2003 | Atlanta |
| Capital Mortgage Finance Corp | 2200 Defense Highway Ste. 100 Crofton, MD 21114 | Washington, DC | 05/19/2003 | Philadelphia |
| Citizens First Mortgage Solutions, Inc | 3145 Tucker Norcross Rd Tucker, GA 30084 | Atlanta, GA | 06/23/2003 | Atlanta |
| Countrywide Home Loans, Inc | 4700 Hardy St., Ste. #H Hattiesburg, MS 39402 | Jackson, MS | 06/23/2003 | Atlanta |
| Crest Mortgage Company | 14850 Montfort Dr Ste. 100 Dallas, TX 75254 | Dallas, TX | 06/23/2003 | Denver |
| Crest Mortgage Company | 14850 Montfort Dr Ste. 100 Dallas, TX 75254 | Fort Worth, TX | 06/23/2003 | Denver |
| Decatur Mortgage Company LLC | 6350 Westhaven Dr Ste. H Indianapolis, IN 46254 | Indianapolis, IN | 06/23/2003 | Atlanta |
| Encore Mortgage Service | 1010 Laurel Oak Corp Ctr 301 Voorhees, NJ 08043 | Philadelphia, PA | 05/19/2003 | Philadelphia |
| First Community Mortgage, Inc | 3049 Cleveland Ave Ste. 200 Fort Myers, FL 33901 | Coral Gables, FL | 06/23/2003 | Atlanta |
| First Security Mortgage Service | 13915 Carrollwood Village Run Tampa, FL 33624 | Tampa, FL | 06/23/2003 | Atlanta |
| Golden Empire Mortgage, Inc | 10535 Foothill Blvd., Ste. #460 Rancho Cucamonga, CA 91730 | Santa Ana, CA | 06/23/2003 | Santa Ana |
| Gulf Atlantic Funding Group | 5400 S University Dr Ste. 603 Davie, FL 33328 | Coral Gables, FL | 06/23/2003 | Atlanta |
| KB Capital Corporation | 1950 Spectrum Cr #400 Marietta, GA 30067 | Atlanta, GA | 06/23/2003 | Atlanta |
| Key Bank Trust | 7F Gwynns Mill Court Owings Mills, MD 21117 | Baltimore, MD | 06/23/2003 | Philadelphia |
| Nally Company | 2100 Gardiner Lane Ste. 216 Louisville, KY 40205 | Louisville, KY | 06/23/2003 | Atlanta |
| New Heights Capital, LLC | 2900 Chamblee Tucker Rd, NE Atlanta, GA 30341 | Atlanta, GA | 06/23/2003 | Atlanta |
| New York Mortgage Bankers | 189-10 Hillside Ave. Hollis, NY 11423 | New York, NY | 06/23/2003 | Philadelphia |
| Northland Funding Group, DBA Capital Mortgage Services | 3305 Northland Dr Ste. 208 Austin, TX 78731 | San Antonio, TX | 06/23/2003 | Denver |
| Pinnacle Financial Corp | 12600 World Plaza Ln Fort Myers, FL 33907 | Coral Gables, FL | 05/19/2003 | Atlanta |
| Pryme Investment Mtg. Brokers, Inc | 491 West 5300 South Murray, UT 84123 | Salt Lake City, UT | 05/19/2003 | Denver |
| Radius Capital Corp | 4871 West Avenue M Quartz Hill, CA 93536 | Los Angeles, CA | 06/23/2003 | Santa Ana |
| Saxon Equities Corp | 300 Motor Parkway Hauppauge, NY 11788 | New York, NY | 06/23/2003 | Philadelphia |
| US Mortgage Finance Corp | 901 Dulaney Valley Rd Ste. 801 Towson, MD 21204 | Baltimore, MD | 06/23/2003 | Philadelphia |
Dated: September 5, 2003.
John C. Weicher,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 03-23329 Filed 9-12-03; 8:45 am]
BILLING CODE 4210-27-P