The Department of Housing and Urban Development (HUD) terminated the approval of sixteen branch offices, spanning a total of fifteen different lenders due to higher than normal default rates on loans endorsed by the Mortgagees.
“HUD’s regulations permit HUD to terminate the Agreement with any mortgagee having a default and claim rate for loans endorsed within the preceding 24 months that exceeds 200 percent of the default and claim rate within the geographic area served by a HUD field office, and also exceeds the national default and claim rate,” said a notice published in the Federal Register. “HUD is terminating the Agreement of mortgagees whose default and claim rate exceeds both the national rate and 200 percent of the field office rate.”
Last year, HUD was given the authority to terminate a mortgagee’s authorization to underwrite single family loans backed by the Federal Housing Administration (FHA) in geographic areas where the lender has a high rate of early defaults and claims.
A mortgagee may apply for reinstatement if the affected branch or branches have been terminated for at least six months and the lender continues to be an approved mortgagee.
Branch offices from Access Mortgage Services, Anchor Mortgage, Benefit Funding Corp, Birmingham Bancorp Mortgage Corp, Dedicated Mortgage Associates, and more were terminated. For the full list, see here.