HUD Takes Action Against Over 200 Mortgage Lenders

Days before everyone celebrated the end of 2010, the Department of Housing and Urban Development took action against hundreds of Federal Housing Administration mortgagees for various violations.

According to the Federal Register, HUD’s Mortgagee Review Board took actions against 27 mortgagees for a variety of reasons.  Of the companies, 11 lenders had their FHA approval revoked and 17 received civil penalties totaling $554,000.  Viewpoint Bank was also ordered to make a $505,400 administrative payment to HUD for employment violations.

One of the actions taken by the board was against American Advisors Group (AAG), a reverse mortgage lender based in Irvine, CA.  The Board accepted a settlement offer of $3,500 because an AAG advertisement allegedly misrepresented HUD’s HECM program.

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Another 127 lenders failed to meet the annual requirements for HUD recertification and each had their FHA approval revoked for one year.

To view a list of the companies and actions taken, see here.

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  • $3,500 does not seem like even a slap on the wrist. I bet their legal costs were greater than that. Is the FTC or any other federal government agency taking action against AAG? What about state authorities? Will this be shown in their NMLS file?

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