HUD Seeks To Withdraw Approval For Hawaii HECM Lender

Posted by Orb Staff on October 30, 2009 No Comments
Categories : Residential Mortgage

[link=http://www.hud.gov][u]The U.S. Department of Housing and Urban Development[/u][/link] (HUD) has announced that its Mortgagee Review Board (MRB) is proposing to permanently withdraw the HUD/Federal Housing Administration (FHA) approval of Financial Mortgage USA Inc., a home equity conversion mortgage lender based in Honolulu. In addition, the MRB is imposing the maximum $97,500 civil money penalty available against the company for these violations.

HUD's MRB alleges that the company failed to implement an FHA-required quality control plan, separate its lending operations from those of its affiliated insurance company, conform to prudent lending practices; and properly provide borrowers with housing counseling services. In a statement, the MRB said that it was ‘particularly concerned’ about one case in which the company steered an 88-year-old borrower into purchasing an annuity that would not mature until reached her 104th birthday.

Financial Mortgage USA has 30 days to respond to the board's proposed withdrawal and seek a hearing before an administrative law judge.

SOURCE: HUD

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