Suspended Baltimore-based lender Equitable Trust Mortgage (ETM) reached a settlement agreement with The Federal Housing Administration (FHA) on Friday, ending their suspension.
ETM had been suspended last week for allegedly overcharging 37 borrowers on their origination fees. In addition, 68% of the affected borrowers were minorities, a fact that FHA commissioner David Stevens called “troubling.” By settling without admitting fault or liability, ETM has paid HUD a civil money penalty in the amount of $277,500.
The company also agreed to refund the overcharged amounts to the 37 borrowers, ranging from $500 to $9,135. The total amount refunded will be $147,589.81. If ETM is unable to reach the borrower, the funds will be donated to a HUD approved housing counseling agency.
In an emailed statement on Friday, FHA commissioner Stevens called the settlement “a victory for both HUD and the borrowers who were affected by ETM’s actions.” He added that, “The settlement agreement imposes a significant penalty on ETM for violating HUD requirements, but also provides the wronged borrowers relief in these tough economic times.”
According to HUD data, Equitable Trust Mortgage had a small reverse mortgage operation, endorsing 36 HECMs in FY 2009.
Write to Reva Minkoff