FHA and Ginnie Mae Withdraw Topdot Approval

Topimage_07 The Federal Housing Administration’s Mortgagee Review Board (MRB) permanently withdrew the FHA approval of Premium Capital Funding, LLC, a Jericho, New York based lender doing business as TopDot Mortgage.  The action prevents TopDot from participating in FHA programs and seeks a monetary penalty of $674,000.

In addition, the Gonvernment National Mortgage Association (Ginnie Mae) is defaulting and terminating TopDot as an issuer in its MBS program.  The company will no longer be able to continue to service its $181.2 million of Ginnie Mae securities said HUD.

The MRB and Ginnie Mae took these actions based upon TopDot’s numerous and egregious violations of FHA requirements, including failure to document borrowers’ income, evaluate borrowers’ creditworthiness, and approving loans with grossly excessive debt-to-income ratios without compensating factors to justify approval.

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“This lender demonstrated a pattern of utter disregard for how we do business and its behavior not only put the FHA insurance fund at risk, but placed their own customers at greater risk of foreclosure,” said FHA Commissioner David Stevens.“FHA approval is a privilege that we entrust to the most responsible lenders. If any lender violates that trust, the MRB will take action to protect borrowers, the FHA insurance fund and FHA programs.”

While TopDot may appeal FHA’s withdrawal by submitting a written request for a hearing before an Administrative Law Judge within 30 days, the filing of an appeal does not delay the actions announced today. A complaint seeking civil money penalties will be served on TopDot in due course and the Company will have the opportunity to contest the imposition of the penalties before an Administrative Law Judge.

Topdot endorsed 115 reverse mortgages in 2009 according to HUD data.  You can see their listing at ReverseBase for more information.

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  • That takes care of the entity but what about those who acted in bad faith including the undewriters???? Corporations, DBAs, LLCs, etc. do not make qualification decisions. Penalizing the company is another big, big yawn. Get to the violaTORs and don't just penalize the violaTIONs.

  • Just to have these shady characters out of business is enough right now. The principals should be banned from the mortgage industry or they will just re-open under another name as they have done in the past!

    • treverse,

      It was underwriting which was compromised in the last mortgage crisis. DE underwriters need to understand that they cannot allow inappropriate loans to be approved. If the originators are at fault, they should be penalized.

      But absolutely, if the principals played any role, they should receive the harshest discipline.

  • Just to have these shady characters out of business is enough right now. The principals should be banned from the mortgage industry or they will just re-open under another name as they have done in the past!

  • treverse,rnrnIt was underwriting which was compromised in the last mortgage crisis. DE underwriters need to understand that they cannot allow inappropriate loans to be approved. If the originators are at fault, they should be penalized. rnrnBut absolutely, if the principals played any role, they should receive the harshest discipline.

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