[Federal Register Volume 76, Number 76 (Wednesday, April 20, 2011)]
[Notices]
[Pages 22119-22120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9502]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5511-N-02]
Credit Watch Termination Initiative; Termination of Direct
Endorsement (DE) Approval
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Notice.
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SUMMARY: This notice advises of the cause and effect of termination of
Direct Endorsement (DE) Approval taken by HUD's Federal Housing
Administration (FHA) against HUD-approved mortgagees through the FHA
Credit Watch Termination Initiative. This notice includes a list of
mortgagees which have had their DE Approval terminated.
FOR FURTHER INFORMATION CONTACT: The Quality Assurance Division, Office
of Housing, Department of Housing and Urban Development, 451 Seventh
Street, SW., Room B133-P3214, Washington, DC 20410-8000; telephone
(202) 708-
[[Page 22120]]
2830 (this is not a toll-free number). Persons with hearing or speech
impairments may access that number through 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 HUD's
mortgagee approval regulations at 24 CFR Sec. 202.3. On May 17, 1999
HUD published a notice (64 FR 26769), 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 Approval Agreements
terminated. On January 21, 2010 HUD issued Mortgagee Letter 2010-03
which advised the extended procedures for terminating Underwriting
Authority of Direct Endorsement mortgagees.
Termination of Direct Endorsement Approval: Approval of a DE
mortgagee by HUD/FHA authorizes the mortgagee to underwrite single
family mortgage loans and submit them to FHA for insurance endorsement.
The Approval may be terminated on the basis of poor performance of FHA-
insured mortgage loans underwritten by the mortgagee. The termination
of a mortgagee's DE Approval 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 DE Approval
with any mortgagee having a default and claim rate for loans endorsed
within the preceding 24 months that exceeds 250 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 quarterly
review period ending September 30, 2010, HUD is terminating the DE
Approval of mortgagees whose default and claim rate exceeds both the
national rate and 250 percent of the field office rate.
Effect: Termination of the DE Approval precludes the mortgagee from
underwriting 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 those already underwritten and approved by a DE underwriter, and
cases covered by a firm commitment issued by HUD. Cases at earlier
stages of processing cannot be submitted for insurance by the
terminated mortgagee; however, the cases may be transferred for
completion of processing and underwriting to another mortgagee with DE
Approval 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 reinstatement of the DE
Approval if the DE Approval for the affected area or areas has been
terminated for at least six months and the mortgagee continues to be an
approved mortgagee meeting the requirements of 24 CFR 202.5, 202.6,
202.7, 202.10 and 202.12. The mortgagee's application for reinstatement
must be in a format prescribed by the Secretary and signed by the
mortgagee. In addition, the application must be accompanied by an
independent analysis 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 analysis must be prepared by an independent
Certified Public Accountant (CPA) qualified to perform audits under
Government Auditing Standards as provided by the Government
Accountability 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
20410-8000 or by courier to 490 L'Enfant Plaza, East, SW., Suite 3214,
Washington, DC 20024-8000.
Action: The following mortgagees have had their DE Approvals
terminated by HUD:
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Mortgagee home HUD office Termination
Mortgagee name office address jurisdictions effective date Homeownership centers
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Allied Home Mortgage Corp....... 6100 Pinemont Dr., Cleveland......... 1/18/11 Philadelphia.
Ste 220, Houston,
TX 77092.
Mountain States Mortgage Center. 1333 E. 9400 S., Indianapolis...... 2/28/11 Atlanta.
Sandy, UT 84093.
Mountain States Mortgage Center. 1333 E. 9400 S., Salt Lake City.... 2/28/11 Denver.
Sandy, UT 84093.
Nationwide Home Loans, Inc...... 4100 NE 2nd Ave., Miami............. 1/18/11 Atlanta.
Miami, FL 33137.
US Mortgage Finance Corp........ 225 International Washington DC..... 1/18/11 Philadelphia.
Cir., Ste 102,
Cockeysville, MD
21030.
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Dated: April 13, 2011.
Robert C. Ryan,
Acting Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 2011-9502 Filed 4-19-11; 8:45 am]
BILLING CODE 4210-67-P