Days after terminating origination approval of sixteen branch offices, the Department of Housing and Urban Development continues to clean house by taking action against seven additional lenders for high default rates on loans insured by the Federal Housing Administration (FHA).
According to a notice in the Federal Register, HUD has terminated seven lenders direct endorsement (DE) approval after a review found loans endorsed within the last two years have a default and claim rate that exceeds 250 percent of the national and local rate served by a HUD field office.
Mortgagees approved as a DE are authorized to underwrite single family loans and submit them to FHA for endorsement.
The group of lenders includes Birmingham Bancorp Mortgage Corp, CMG Mortgage Inc., MVB Mortgage Corp, NTFN Inc, Pine State Mortgage Corp, Popular Mortgage Corp, and two Universal Mortgage Corp offices.
Last year, HUD was given the authority to systematically review all DE mortgagees’ defaults and claim rates on loans during the initial two years from the date of the commencement of the amortization. Previously, HUD was only able to terminate loan origination approval authority of a mortgagee.
View a copy of the notice, here.