Credit Watch Termination Initiative:
Federal Register Volume 76, Number 126 (Thursday, June 30, 2011)
Notices
Pages 38407-38408
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
FR Doc No: 2011-16489
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Docket No. FR-5511-N-04
Credit Watch Termination Initiative; Termination of Direct
Endorsement (DE) Approval
AGENCY: Office of the Assistant Secretary for Housing--Federal Housing
Commissioner, HUD.
ACTION: Notice.
SUMMARY: This notice advises of the cause and effect of termination of
Direct Endorsement (DE) Approval taken by HUD's Federal Housing
Administration (FHA) against HUD-approved mortgagees through the FHA
Credit Watch Termination Initiative. This notice includes a list of mortgagees which have had their DE Approval terminated.
FOR FURTHER INFORMATION CONTACT: The Quality Assurance Division, Office of Housing, Department of Housing and Urban Development, 451 Seventh
Street, SW., Room B133-P3214, Washington, DC 20410-8000; telephone
(202) 708-2830 (this is not a toll-free number). Persons with hearing or speech impairments may access that number through TTY by calling the
Federal Information Relay Service at (800) 877-8339.
SUPPLEMENTARY INFORMATION: HUD has the authority to address deficiencies in the performance of lenders' loans as provided in HUD's mortgagee approval regulations at 24 CFR 202.3. On May 17, 1999 HUD published a notice (64 FR 26769), on its procedures for terminating
Origination Approval Agreements with FHA lenders and placement of FHA lenders on Credit Watch status (an evaluation period). In the May 17, 1999 notice, HUD advised that it would publish in the Federal Register a list of mortgagees, which have had their Approval Agreements terminated. On January 21, 2010 HUD issued Mortgagee Letter 2010-03 which advised the extended procedures for
Page 38408
terminating Underwriting Authority of Direct Endorsement mortgagees.
Termination of Direct Endorsement Approval: Approval of a DE mortgagee by HUD/FHA authorizes the mortgagee to underwrite single family mortgage loans and submit them to FHA for insurance endorsement.
The Approval may be terminated on the basis of poor performance of FHA- insured mortgage loans underwritten by the mortgagee. The termination of a mortgagee's DE Approval is separate and apart from any action taken by HUD's Mortgagee Review Board under HUD's regulations at 24 CFR part 25.
Cause: HUD's regulations permit HUD to terminate the DE Approval 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. For the quarterly review period ending December 31, 2010, HUD is terminating the DE
Approval of mortgagees whose default and claim rate exceeds both the national rate and 200 percent of the field office rate.
Effect: Termination of the DE Approval precludes the mortgagee from underwriting FHA-insured single-family mortgages within the area of the
HUD field office(s) listed in this notice. Mortgagees authorized to purchase, hold, or service FHA-insured mortgages may continue to do so.
Loans that closed or were approved before the Termination became effective may be submitted for insurance endorsement. Approved loans are those already underwritten and approved by a DE underwriter, and cases covered by a firm commitment issued by HUD. Cases at earlier stages of processing cannot be submitted for insurance by the terminated mortgagee; however, the cases may be transferred for completion of processing and underwriting to another mortgagee with DE
Approval in that area. Mortgagees are obligated to continue to pay existing insurance premiums and meet all other obligations associated with insured mortgages.
A terminated mortgagee may apply for reinstatement of the DE
Approval if the DE Approval for the affected area or areas has been terminated for at least six months and the mortgagee continues to be an approved mortgagee meeting the requirements of 24 CFR 202.5, 202.6, 202.7, 202.10 and 202.12. The mortgagee's application for reinstatement must be in a format prescribed by the Secretary and signed by the mortgagee. In addition, the application must be accompanied by an independent analysis of the terminated office's operations as well as its mortgage production, specifically including the FHA-insured mortgages cited in its termination notice. This independent analysis shall identify the underlying cause for the mortgagee's high default and claim rate. The analysis must be prepared by an independent
Certified Public Accountant (CPA) qualified to perform audits under
Government Auditing Standards as provided by the Government
Accountability Office. The mortgagee must also submit a written corrective action plan to address each of the issues identified in the
CPA's report, along with evidence that the plan has been implemented.
The application for a new Agreement should be in the form of a letter, accompanied by the CPA's report and corrective action plan. The request should be sent to the Director, Office of Lender Activities and Program
Compliance, 451 Seventh Street, SW., Room B133-P3214, Washington, DC 20410-8000 or by courier to 490 L'Enfant Plaza, East, SW., Suite 3214,
Washington, DC 20024-8000.
Action: The following mortgagees have had their DE Approvals terminated by HUD:
Mortgagee home
HUD office
Termination
Homeownership
Mortgagee name
office address
jurisdictions
effective date
centers
Dover Mortgage Company......... 711 E Morehead
Knoxville......... 4/26/11............ Atlanta.
Street,
Charlotte, NC 28202.
First Ohio Banc and Lending,
6100 Rockside
Atlanta........... 6/21/11............ Philadelphia.
Inc..
Woods Blvd., Ste. 1, Independence,
OH 44131.
First Ohio Banc and Lending,
6100 Rockside
Cleveland......... 6/21/11............ Philadelphia.
Inc..
Woods Blvd., Ste. 1, Independence,
OH 44131.
Mac-Clair Mortgage Corp........ G4355 S Saginaw
Detroit........... 4/26/11............ Philadelphia.
St., Burton, MI 48529.
Mac-Clair Mortgage Corp........ G4355 S Saginaw
Flint............. 4/26/11............ Philadelphia.
St., Burton, MI 48529.
Dated: June 22, 2011.
Robert C. Ryan,
Acting Assistant Secretary for Housing--Federal Housing Commissioner.
FR Doc. 2011-16489 Filed 6-29-11; 8:45 am
BILLING CODE 4210-67-P
