It appears that the Federal Housing Administration is following through on promises to get tough on lenders. The federal mortgage insurer pulled the licenses of three lenders and a fourth lender was suspended. The FHA ejected Strategic Mortgage Corp., of Oklahoma City, Okla.; ProMortgage Inc., of Claremore, Okla.; and Americare Investment Group Inc., of Arlington, Texas. It suspended Home Mortgage Inc., of Burr Ridge, Ill., for six months. Strategic and ProMortage were ejected for failing to uphold FHA loan standards, including charging excessive fees and having poor quality controls. Americare violated terms of a previous settlement, and Home Mortgage failed to disclose the indictment of a part-owner.
As you probably know, the FHA doesn’t make loans but only insures lenders against losses. The FHA’s capital cushion has eroded sharply because of rising mortgage defaults. Officials of FHA have promised to be vigilant in cracking down on lenders they believe are putting the agency’s reserves at risk. Hopefully, they are serious and will continue to follow up on this promise.
Source: Wall Street Journal
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