HUD Archives: News Releases

HUD No. 00-248
Further Information: For Release
In the Washington, DC area: 202/708-0685 Tuesday
Or contact your local HUD office September 19, 2000


WASHINGTON – Housing and Urban Development Secretary Andrew Cuomo announced today that HUD has sanctioned 77 lenders across the country, withdrawing Federal Housing Administration (FHA) lending authority from 15 of them, proposing similar action against four others and imposing sanctions ranging from indemnification of loans to fines against another 58.

Cuomo said the administrative actions by HUD’s Mortgagee Review Board should serve as fair warning to unscrupulous lenders who violate FHA regulations and defraud the public.

"These sanctions demonstrate clearly that we meant business when we said we had zero tolerance for fraud, waste and abuse," Cuomo said. "Bad lenders beware. If you try to defraud the consumer, or HUD, or don’t follow the rules, we will come after you and take action."

The sanctions, which were published in the Federal Register, are the result of standard compliance reviews required of all FHA-authorized lenders. Some 140 monitors in the Quality Assurance Divisions of HUD’s four Home Ownership Centers (HOCs) – in Atlanta, Denver, Philadelphia and Santa Ana, CA, – conducted the reviews and referred those lenders found to have problems to the Mortgagee Review Board. The Federal Housing Commissioner and five other senior HUD officials comprise the board.

The board imposed its severest penalty – immediate and permanent withdrawal of authority to lend FHA-insured loans – against Allstate Mortgage Co. of Norwalk, CA; Charter Mortgage Corp. of Fort Lauderdale, FL; DiverseAmerican Mortgage Co., of East Greenwich, RI; and Rockwell Equities, Inc., of Jericho, NY. DiverseAmerican was also fined $250,000 and Rockwell Equities $11,000.

HUD debarred Apollo Mortgage and Financial Services, Inc. of St. Petersburg, FL, from doing business with the federal government for one year, and the Mortgagee Review Board recommended that its principals be debarred for the same period of time. The company was also fined $40,000. Island Mortgage Network, Inc., Melville, NY, was suspended from making FHA loans and fined $66,000.

The Mortgagee Review Board withdrew FHA lending authority from Assurety Mortgage Group, Inc., of Decatur, GA, for three years; Financial Research Services, Inc., Miami, 10 years; GM Group, Inc., Richardson, TX, three years; J. P. Mortgage Co., North Miami, FL, three years; Madison Home Equities, Inc., Carle Place, NY, five years; Mical Mortgage Corp./FINET Holdings Corp, San Diego, three years (extending a prior one-year withdrawal by two years); ML Pacific Investment Capital d.b.a. Pacific Investment Capital, Anaheim, CA, three years; and United Southern Mortgage Corp. of Roanoke, Virginia Beach, VA, three years.

HUD also fined Assurety Mortgage Group $45,500; Financial Research Services, $75,000; GM Group, $700,000; J. P. Mortgage, $75,000; Madison Home Equities, $71,500; Mical Mortgage/FINET Holdings, $500,000; ML Pacific Investment Capital, $40,000; and United Southern Mortgage, $250,000.

The Mortgagee Review Board proposed three-year withdrawals of FHA lending authority for Amerifirst Mortgage Corp. of Hempstead, NY; Empire Funding Corp., Austin, TX; Hollywood Mortgage, Inc., Palmdale, CA; and Mortgage Acceptance Corp., Floral Park, NY. HUD also fined Amerifirst Mortgage $100,000; Empire Funding, $60,500; Hollywood Mortgage, $28,600; and Mortgage Acceptance, $75,000.

The Mortgagee Review Board proposed settlements against 58 other lenders that include indemnifying HUD for loans in which there were violations of HUD/FHA requirements and regulations and fines ranging from $1,000 to $145,000.

In fiscal year 2000, HUD saved the taxpayer $10.59 million in indemnified loans and imposed fines totaling more than $3.3 million. Since 1995, HUD has saved the taxpayer $38.09 million in indemnified loans and imposed about $8 million in fines.

A complete listing of the Mortgagee Review Board’s administrative actions can be found at:


Content Archived: December 13, 2009