Posted on: 13th Jan, 2010 03:05 pm
HUD officials have said that they haven't found any fraud among the 15 lenders, but that they are seeking information from those with the highest default rates. This is an effort to stop the bleeding - FHA has been taking some severe losses in recent months.
Here are the lenders who've been subpeonad:
First Tennessee Bank N.A., Memphis, TN
Alethes LLC, Lakeway, TX
Security Atlantic Mortgage Company, Edison, NJ
Pine State Mortgage Corporation, Atlanta, GA
Birmingham Bancorp Mortgage Corporation, Birmingham, MI
Alacrity Financial Services LLC, Southlake, TX
Assurity Financial Services LLC, Englewood, CO
D and R Mortgage Corporation, Farmington, MI
Webster Bank, Waterbury, CT
Mac-Clair Mortgage Corporation, Flint, MI
Americare Investment Group, Arlington, TX
1st Advantage Mortgage, Lombard, IL
American Sterling Bank, Independence, MO
Sterling National Mortgage Company, Great Neck, NY
Dell Franklin Financial LLC, Columbia, MD
Any companies that are currently under investigation or subject to an open audit were not included on the list.
It's always so nice to see little old Connecticut included with the big boys! Webster started as a little Savings & Loan and grew to be a big boy by itself - a few too many risks taken, maybe.
Here are the lenders who've been subpeonad:
First Tennessee Bank N.A., Memphis, TN
Alethes LLC, Lakeway, TX
Security Atlantic Mortgage Company, Edison, NJ
Pine State Mortgage Corporation, Atlanta, GA
Birmingham Bancorp Mortgage Corporation, Birmingham, MI
Alacrity Financial Services LLC, Southlake, TX
Assurity Financial Services LLC, Englewood, CO
D and R Mortgage Corporation, Farmington, MI
Webster Bank, Waterbury, CT
Mac-Clair Mortgage Corporation, Flint, MI
Americare Investment Group, Arlington, TX
1st Advantage Mortgage, Lombard, IL
American Sterling Bank, Independence, MO
Sterling National Mortgage Company, Great Neck, NY
Dell Franklin Financial LLC, Columbia, MD
Any companies that are currently under investigation or subject to an open audit were not included on the list.
It's always so nice to see little old Connecticut included with the big boys! Webster started as a little Savings & Loan and grew to be a big boy by itself - a few too many risks taken, maybe.
let me clarify something - i should have said this earlier...
just because the banks/mortgage companies are on this list doesn't mean they've broken any laws or been involved in any fraudulent activity. it's simply that FHA has taken a beating on a lot of defaulted loans in the last year or so, and these guys have been high on the default list. so, it's just an investigation to see what may have gone wrong, and to try to halt the incidence of defaults in the future.
just because the banks/mortgage companies are on this list doesn't mean they've broken any laws or been involved in any fraudulent activity. it's simply that FHA has taken a beating on a lot of defaulted loans in the last year or so, and these guys have been high on the default list. so, it's just an investigation to see what may have gone wrong, and to try to halt the incidence of defaults in the future.
me again...
i just read up a little bit more on this, so here's some more meat.
the HUD Inspector General wanted to find out, with these 15 lenders, why defaults have so elevated with them, and whether it might have been the result of fraudulent activity.
a lot of the loans that defaulted did so quickly, and HUD's plan is to investigate to try to determine responsibility and determine if action is needed to be taken against individuals or the corporations.
almost one in five loans made by Alethes LLC one of those on the above list, over the past two years went into default, compared with a national average of about 5 percent. two others on the list, Alacrity Lending and Pine State Mortgage Corporation, had default rates of 15 per cent.
i just read up a little bit more on this, so here's some more meat.
the HUD Inspector General wanted to find out, with these 15 lenders, why defaults have so elevated with them, and whether it might have been the result of fraudulent activity.
a lot of the loans that defaulted did so quickly, and HUD's plan is to investigate to try to determine responsibility and determine if action is needed to be taken against individuals or the corporations.
almost one in five loans made by Alethes LLC one of those on the above list, over the past two years went into default, compared with a national average of about 5 percent. two others on the list, Alacrity Lending and Pine State Mortgage Corporation, had default rates of 15 per cent.
George, you've correctly mentioned that an investigation will be conducted against these lenders to find out who is responsible for the defaults. After the investigation is complete, appropriate actions will be recommended which would be taken against individuals or/and corporations. FHA has decided to take risk management seriously as they are alarmed by the amount of claims against the FHA insured loans by some of the poor performing companies.
and in this morning's local news, i learned that the webster bank defaults had occurred on out-of-state loans in 18 of the 20 cases they had. these were loans originated by their wholesale division, which is now defunct.
the government is alarmed at the incidence of default in general, and these lenders are, i guess, the worst of the lot.
the government is alarmed at the incidence of default in general, and these lenders are, i guess, the worst of the lot.
Hi George,
Such an action was expected with the number of defaults on FHA mortgages rising at an alarming rate. The FHA reserve has already taken a hit and it has gone below the Congress mandated 2% limit. In such a situation, it is natural that the FHA will start to look out for reasons behind such huge number of mortgage defaults. Unless such measures are taken, it will be really difficult for them to curb the increasing number of defaults on FHA-insured loans.
Such an action was expected with the number of defaults on FHA mortgages rising at an alarming rate. The FHA reserve has already taken a hit and it has gone below the Congress mandated 2% limit. In such a situation, it is natural that the FHA will start to look out for reasons behind such huge number of mortgage defaults. Unless such measures are taken, it will be really difficult for them to curb the increasing number of defaults on FHA-insured loans.