HUD MORTGAGEE REVIEW BOARD TAKES ACTION AGAINST NEW YORK LENDERS

Housing and Urban Development Secretary Andrew Cuomo today announced that HUD has taken action against two New York lending firms to restrict their dealings with the Federal Housing Administration and has imposed more than $137,000 in fines.

HUD's Mortgagee Review Board took the action against Madison Home Equities, Inc. of Carle Place, NY, and Island Mortgage Network, Inc. of Melville, NY, for violations in FHA programs.

The Board withdrew HUD/FHA approval nationwide for five years and imposed a civil money penalty of $71,500 against Madison Home Equities for violations including: use of false documentation and failure to resolve conflicting information in HUD/FHA loan origination, failure to adhere to HUD/FHA credit requirements for mortgage loan approval, and failure to ensure that appraisals met HUD/FHA requirements.

A $66,000 civil money penalty was imposed against Island Mortgage Network and HUD/FHA approval was withdrawn for three years within the HUD Field Office jurisdictions of Buffalo and Albany, NY, for violations including: use of false documentation or conflicting information to approve HUD/FHA mortgagors, charging fees not in compliance with HUD/FHA guidelines, and failure to provide loan origination documents for review by HUD/FHA.

HUD's Mortgagee Review Board has increased its activity to include additional reviews of FHA lending activities. During 1999, 32 FHA institutions went before the Review Board, which took action that should result in $7.7 million being reclaimed for housing programs.