HUD Commissioner David H. Stevens announced a new initiative this week that focuses on mortgage companies with significant claims against the FHA mortgage insurance program, issuing 15 subpoenas to mortgage lenders across the country demanding documentation on failed loans that resulted in claims paid by the FHA insurance fund.

According to a press release posted on the HUD website:

“This initiative was prompted, in part, by the FHA Commissioner, David Stevens, who was alarmed by the incidence of claims against the FHA insurance fund by a number of poor performing companies and reached out to the HUD OIG for assistance.

FHA Commissioner David Stevens said, “We are taking risk management extremely seriously. In addition to the policy changes we are implementing and additional changes we plan to announce later this month, we need to hold FHA lenders accountable for the high rates of defaults and claims against FHA. The Inspector General’s initiative will help us determine whether there is fraud and better manage risk in the long run.

”The HUD OIG identified these direct endorsement companies from an analysis of loan data focusing on companies with a significant number of claims, a certain loan underwriting volume, a high ratio of defaults and claims compared to the national average, and claims that occurred earlier in the life of the mortgage. These are key indicators of problems at the origination or underwriting stages. The HUD OIG wants to see why these loans failed.”

The companies served with subpoenas included:

  • First Tennessee Bank N.A., Memphis, TN
  • Alethes LLC, Lakeway, TX
  • Security Atlantic Mortgage Co., Edison, NJ
  • Pine State Mortgage Corporation, Atlanta, GA
  • Birmingham Bancorp Mortgage Corporation, West Bloomfield, MI
  • Alacrity Financial Services, LLC, Southlake, TX
  • Assurity Financial Services, LLC, Englewood, CO
  • D and R Mortgage Corporation, Farmington, MI
  • Webster Bank, Cheshire, CT
  • Mac-Clair Mortgage Corporation, Flint, MI
  • Americare Investment Group, Inc., Arlington, TX
  • 1st Advantage Mortgage, Lombard, IL
  • American Sterling Bank, Independence, MO
  • Sterling National Mortgage Company Inc., Great Neck, NY
  • Dell Franklin Financial LLC, Columbia, MD

No California mortgage lenders on the HUD subpoena list…yet.

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