chow
Joined: 22 Jan 2005
Posts: 2350
Location: Cornfield County, Indiana
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| Posted: Mon Jan 30, 2006 10:50 am Post subject: New FHA Default Rate- 150% |
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FEDERAL MORTGAGE e-ALERT©
(January 30, 2006)
HUD/FHA FINAL CREDIT WATCH RULE GOES INTO EFFECT
FACTS
FHA now will
(1) Establish a fully computerized Credit Watch status notification process through use of the FHA Neighborhood Watch Early Warning System;
(2) remove the regulatory “cap” on the default and claim rate for placing a mortgagee on Credit Watch status;
(3) prohibit a mortgagee that has received a notice of proposed termination from establishing a new branch in the lending area covered by the proposed termination;
(4) provide that the default and claim thresholds underlying the Credit Watch Termination Initiative apply to both underwriting and originating mortgagees;
(5) codify the definition of “underserved area” that is currently used under the Credit Watch Termination Initiative;
(6) provide that the date of mortgage origination will be considered to be the date the loan transaction commences amortization, rather than the date of endorsement for FHA mortgage insurance;
(7) specify the timeframes for the informal conference that may be requested by a mortgagee prior to termination; and
(8) describe the procedures a terminated mortgagee must follow to have its origination approval agreement reinstated. (71fr4970)
MORAL
Defaults and termination of FHA approval now kick in at 150%. This means if you exceed normal default rate for the HUD field office by 50% or more HUD will start the process of pulling your approval to do FHA loans. You will have 30 days from notice to request a conference to contest the withdrawal and 60 days after an adverse decision to appeal. Good Luck.
FEDERAL TRADE COMMISSION FINES CREDIT REPORTING COMPANY $120,000 FOR FAILING TO VERIFY CREDIT INFORMATION PROPERLY
FACTS
Far West Credit, Inc. will pay $120,000 to settle Federal Trade Commission charges that it did not follow reasonable procedures to assure the accuracy of the information in the consumer reports it sold to mortgage companies, in violation of federal law.
According to an FTC complaint, Far West creates consumer credit reports for use by the mortgage industry in evaluating consumers for loans. Far West buys credit reports from the major credit reporting agencies, Equifax, TransUnion and Experian, and merges the information about the consumers. If there is insufficient information about the consumer’s credit worthiness from the major credit reporting agencies, Far West will accept information from the consumer, or other interested parties, to show consumers’ credit status with businesses such as cable companies, utilities, “rent-to-own” businesses and insurance companies – operations that do not report normally to the nationwide credit bureaus. They add this information to the reports they prepare on the consumer.
The complaint alleges that Far West provided consumer reports to Keystone Mortgage and Investment Company, Inc., a home lender. Keystone had an interest in making the loans, and Keystone’s employees provided documentation of borrowers’ credit accounts to Far West to be used in creating consumer reports for those borrowers. The credit information provided by Keystone employees was not adequately verified by Far West, the FTC charges. In fact, documentation provided by Keystone for many of the consumers was false. For example, in many cases Keystone documented accounts with utility and cable companies that did not even service the areas where the consumers lived, according to the complaint.
Keystone made mortgage loans based on the inaccurate consumer reports, and the mortgages were insured by the Fair Housing Administration (FHA) of the U. S. Department of Housing and Urban Development. Some of the mortgages have defaulted, resulting in losses to the FHA program.
The FTC charged Far West with violating the Fair Credit Reporting Act and the FTC Act. The settlement will require Far West to have in place reasonable procedures to assure the maximum possible accuracy of information in consumer reports that it prepares, and will require Far West to pay $120,000 in civil penalties. The settlement also contains certain record keeping and reporting requirements to allow the FTC to monitor compliance. (OT12306)
MORAL
What appears is the loan officer does not like the first merger of the three bureaus, then lets give this company creative alternative credit. You would think they would at least pick utilities and cable service that services the area. I wonder how the criminal indictments are coming along? I wonder what happened or is happening to Keystone?
CLASS ACTION AGAINST SIX MORTGAGE COMPANIES
FOR PREDATORY LENDING IN MARYLAND
Now this one is really is interesting.. Find the deepest pockets?... :roll:
FACTS
Peter Angelos, a nationally known class-action attorney, has filed lawsuits against six mortgage companies alleging that the lenders engaged in predatory practices in Maryland. The class action lawsuits are against Irwin Financial Corp., Provident Bankshares Corp., Mortgage Lenders Network USA Inc., GreenTree Mortgage Corp., American Mortgage Express Corp., and Admiral Mortgage Inc., according to the Baltimore Sun. "In general, the complaints allege that the companies charged excessive or illegal fees," the Sun reported. During his career, Mr. Angelos has won huge settlements against tobacco companies. He is the owner of the Baltimore Orioles baseball team. (nmn12706)
MORAL
Let me see? If he made enough money in class actions to buy the Baltimore Orioles, I would say theses companies have something to worry about.
NEVADA ISSUES PROPOSED SETTLEMENTS AGAINST KYLE H. PULSIPHER AND ENLOE ENTERPRISES INC., DBA INVESTOR LENDING
FACTS
If you visit the MLD website you will find a proposed settlement pending against Kyle H. Pulsipher and Enloe Enterprises, Inc., dba Investor Lending. The Settlement with Mr. Pulsipher is to revoke the license PERMANENTLY such that Mr. Pulsipher can never again be connected with mortgage brokering or lending in the state of Nevada as well as assess a $22,500 for investigative costs and attorney fees.
In the matter of Enloe Enterprises Inc., dba Investor Lending, the commissioner has a proposed settlement of $7,500 from allegedly operating from an unlicensed location. (mldwebsite12906)
MORAL
The Enloe one is a decent settlement if accepted. The Pulsipher one as settled if accepted is not only better, but much better than the one originally proposed in the originally issued Order to Cease and Desist. BUT isn’t it better and definitely cheaper to comply?
SEMINARS
February 3, 2006 – 9-12
How to Survive an MLD Audit without losing your license.
Location: Equity Title - 7360 West Flamingo Road, Las Vegas, Nevada
1-4:30 - TILA-RESPA Updates. We will cover the updates from 2005 to January 2006 including how to do high-rate high fee loan without violating Section 32 of Reg Z, what is and is not a kickback; how to legally give someone a fee in a cooperative brokerage without violating RESPA and cases where brokers, loan officers and real estate salespeople have been disciplined and fined by RESPA Police for accepting kickbacks.
Location: Equity Title at same location
The above two seminars are accredit in Nevada for renewing your license. They may or may not be accredit for other state licensing renewals. Please check with the agency that issues your license.
THE INFORMATION HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE.
If you want to make certain you receive our e-mails you must put our e mail address in your address book. Otherwise, AOL among other servers may reject the message and you will not receive the information.
Herman Thordsen
IF YOU HAVE TROUBLE WITH:
• MORTGAGE FRAUD
• NEVADA MORTGAGE LENDING DIVISION AUDITS
• HUD AUDITS AND THE MORTGAGEE REVIEW BOARD;
• LICENSING IN THE VARIOUS STATES
• DEPARTMENT OF REAL ESTATE AUDITS OR LICENSE DISCIPLINARY MATTERS
• DEPARTMENT OF CORPORATIONS AUDITS OVER CFL OR RMLA LICENSES;
• MINIMUM WAGE OR OVERTIME LAWS
Please contact Herman Thordsen toll free (888) 667- 8529.
Go to www.lendinglaw.com and upcoming events for further details. |
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