Prospect Mortgage of Sherman Oaks, CA, this week joined a growing list of FHA lenders that have opted to settle federal false claims allegations arising from flawed underwriting and poor quality control. Prosecutors with the U.S. Attorneys Offices for the Northern Districts of Georgia and California announced a $4.16 million settlement with Prospect stemming from alleged fraudulent FHA lending practices at two of its Southeastern branches. An FHA direct endorsement lender, Prospect’s branches in Florida and North Carolina allegedly violated the False Claims Act by falsely certifying compliance with FHA underwriting and quality control requirements. Consequently, the FHA suffered substantial losses in claim payments when the loans defaulted. HUD’s Atlanta Home Ownership Center reported that Prospect had a 12.29 percent default rate, well in excess of the national average, between December 2007 and ...
The Department of Veterans Affairs has awarded a 10-year contract to VRM Mortgage Services to manage VA’s real estate-owned assets and service its loan portfolio. The contract requires VRM, a 10-year-old California-based real estate services contractor, to manage, market and sell VA REO properties, and provide other real estate services as well. The new contract was negotiated from a previous five-year contract that was awarded to VRM when VA consolidated both REO management and portfolio servicing into a single contract.VA has often sold conveyed properties with seller loan financing, known as vendee loans, to help keep distressed vet homeowners in their homes. Vendee lending is an arrangement whereby a buyer uses VA financing to purchase a property in the agency’s REO inventory. “Once a loan is sold under the vendee financing program, we would monitor that loan as well as ...
The latest issue of FHA’s Lender Insight provides additional information to lenders regarding the new Loan Review System that was launched on May 15, 2017. FHA urged lenders to keep their contact information current in FHA Connection and in the Lender Electronic Appraisal Portal so that they receive automated system notifications on time. Also, lenders should review current FHAC user access for appropriate roles, the agency added. Lenders’ in-house FHAC application coordinators are authorized to grant access to, and assign roles within, the LRS. Having the correct roles should enable users to access the system from the FHAC menu, the FHA said. In addition, the lender must take a photo of any error messages that might appear on screen before contacting the FHA Resource Center, the agency advised. Be prepared to provide the date and time of the attempted login, user ID, lender user ID and the ...
Chicago HECM Lender Arraigned on Fraud Charges. Mark Steven Diamond, a mortgage loan originator with offices in Chicago and Calumet City, IL, was arraigned on fraud charges in connection with a $7 million reverse mortgage scheme that targeted elderly homeowners and FHA lenders. According to the Department of Justice, Diamond deceived lenders into making FHA-insured reverse mortgage loans to homeowners who did not apply for a loan or had been beguiled to do so by the smooth-talking suspect. Diamond allegedly pocketed title-company checks intended for the borrowers, with the help of an unindicted co-schemer. Cynthia Wallace, who posed as a representative of the Department of Housing and Urban Development, was indicted along with Diamond. Using at least three aliases, Wallace allegedly collected money from victims for home repairs, which she claimed Diamond would ...
The purchase-mortgage market is beginning to kick into gear, according to an exclusive Inside Mortgage Trends analysis of agency mortgage-backed securities issuance through the first five months of 2017. Collectively, Fannie Mae, Freddie Mac and Ginnie Mae securitized $268.36 billion of single-family purchase mortgages from January through May. That was up 10.5 percent from the same period in 2016. Purchase-mortgage volume has ... [Includes one data chart]
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