Reverse Mortgage Lender Violates FHA Requirements, HUD Takes Action

Last week the U.S. Department of Housing and Urban Development’s Mortgagee Review Board took action against more than 120 lenders for violating FHA requirements.  Violations range from failure to conduct sufficient quality control, to failure to continue to meet FHA recertification requirements, to falsifying loan documents.

"At this time of uncertainty in the mortgage market, FHA needs to be especially vigilant in making sure that its approved lenders meet the highest standards of conduct," said HUD Secretary Shaun Donovan. "We expect, and more importantly American homebuyers deserve, that when they deal with an FHA-approved lender, they’re dealing with a lender they can trust.

The only reverse mortgage related violation listed was from Academy Mortgage.  See below:

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Academy Mortgage, LLC, Catonsville,
MD [Docket No. 07–7039–MR]
Action: Settlement Agreement signed
March 12, 2009.

Without admitting liability or fault, Academy Mortgage, LLC, (Academy) agreed to pay HUD a civil money penalty in the amount of $18,500.

Cause: The Board took this action based on the following violations of HUD/FHA requirements in which Academy: Permitted non-approved brokers to originate Home Equity Conversion Mortgage (HECM) loans in violation of HUD/FHA requirements;
and failed to comply with HUD/FHA housing counseling referral requirements during the origination of HECM loans.

Academy did not respond to requests from RMD for further comment on the violation.  You can see a list of all the companies here.