HUD Permanently Bars Lender From FHA Insurance

A Dallas-based lender lost privileges Friday when ""HUD"":http://portal.hud.gov/hudportal/HUD announced that it had permanently banned it from underwriting and originating new mortgages backed by the ""Federal Housing Administration"":http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/fhahistory (FHA).

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Effective immediately, ""AmericaHomeKey, Inc."":http://www.americahomekey.com/ (AHK), will no longer have the ability to churn out loans guaranteed by federal mortgage insurance.

HUD also slapped the company with $268,000 in penalties for what it called ""repeated and serious violations of FHA requirements.""

The department leveled a number of charges against AHK, claiming that it failed to properly document borrower eligibility

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for loans in accordance with closing costs, income requirements, and unallowable fees.

""When we begin to see a pattern of failure to apply our standards, we will act to protect FHA's financial health as well as consumers,"" FHA Acting Commissioner ""Carol Galante"":http://portal.hud.gov/hudportal/HUD?src=/about/principal_staff/assistant_secretary_galante said in a statement. ""We expect lenders to meet our requirements, not just to protect the safety of our insurance fund but to make certain they don't set up borrowers to fail by putting them into mortgages they ultimately can't sustain.""

Also Friday, ""Ginnie Mae"":http://www.ginniemae.gov/ terminated an inactive license for AHK to carry federal mortgage insurance.

If past remarks by Galante signal anything, the action against AHK reflects a decision by the agency to more rigorously pursue lender fraud.

""The bottom line is that we are continuing to hold lenders accountable for fraudulent or poorly underwritten loans where they didn't follow our standards,"" she said in a past interview with _MReport_.

""We want to make sure our rules are very clear to ensure that lenders comply,"" she said.

_Editor's Note: To see the full, exclusive interview with FHA Acting Commissioner Carol Galante, ""click here"":http://thefivestar.com/mrptsubscribe/template.php to subscribe to_ MReport _magazine and request our March issue._