As the FHA promised, saying that it would crack down on FHA approved lenders that were not meeting FHA mortgage lending guidelines, the FHA revoked the FHA lending ability of three companies and suspended another from the program.
FHA approval completely withdrawn for:
- Americare Investment Group Inc. (d/b/a Premier Capital Lending and TopDot Mortgage)
- Strategic Mortgage Corporation (Strategic)
- ProMortgage Inc.
FHA suspension is applied to:
- HMI (Home Mortgage, Inc. of Burr Ridge, IL)
Major offenses leading to the revocation and suspension of the above companies ranged from charging borrowers excessive fees, to making false certifications, to keeping owners in place that were accused of bank fraud.
It was even reported that ProMortgage Inc. allowed borrowers to submit verification of employment directly to the lender, which as you may guess is a big no-no, as it pretty much allows anyone to manipulate and falsify documents.
FHA Commissioner David Stevens stated in the report that: "FHA takes its oversight role very seriously and will move swiftly and decisively to protect borrowers from unscrupulous lenders". He went on to say: "Any lender who refuses to comply with FHA requirements will simply no longer enjoy the privilege of participating in FHA programs."
By enjoy, he means exist, because there is a large majority of mortgage lenders in the U.S. that rely only on the origination of FHA loans to stay in business. I will note here that two other lenders; Action Mortgage Corp. of Cranston, RI and Cooper and Shein, LLC (d/b/a Great Oak Lending Partners) of Timonium MD, were placed on probation for a period of six months for misleading advertising.
I have a feeling that this is just the ‘tip of the iceberg' when it comes to the number of mortgage lenders/brokers that will have their FHA approval revoked, suspended or placed on probation in the near future.