Skip to main content

FHA Reaches $230,000 Settlement With First Guaranty Mortgage Corporation

NationalMortgageProfessional.com
Apr 19, 2011

The Federal Housing Administration’s Mortgagee Review Board (MRB) has announced a settlement agreement with a Virginia-based mortgage lender for failing to apply FHA’s underwriting standards when approving loans. Among the alleged violations, the MRB claimed that First Guaranty Mortgage Corporation (FGMC) ignored blemished credit and payment histories, approved loans with debt-to-income (DTI) ratios that exceeded benchmarks set forth by the U.S. Department of Housing & Urban Development (HUD), and permitted borrowers to be charged improper mortgage broker fees. As part of the settlement, First Guaranty Mortgage Corporation (FGMC) agrees to pay a $127,500 civil monetary penalty and to reimburse more than $102,000 to FHA for past insurance claims and broker fees paid by borrowers who have since defaulted and been foreclosed upon. In addition, FGMC will refund nearly $7,900 in improper mortgage broker fees to four families. Finally, FGMC agrees to reimburse HUD for any losses that may be incurred if any one of 18 additional loans goes into default within five years of settlement. “FHA must ensure that lenders meet the strictest standards when underwriting loans, and not charge borrowers unnecessary or excessive fees,” said Acting FHA Commissioner Robert Ryan. “It’s critical that all lenders do the hard work at the front end of any mortgage to ensure homeownership can be sustained over the long haul.” FHA’s Mortgagee Review Board sanctions FHA-approved lenders for violations of the agency’s program requirements. The Board has the authority to withdraw the FHA approval of a lender that violates FHA requirements so that the lender cannot participate in FHA programs. The Board also has authority to enter into settlement agreements with lenders and can impose civil money penalties, probation, suspension, and issue letters of reprimand. This fiscal year alone, the MRB took 20 administrative sanctions against lenders, including reprimands, probations, suspensions, withdrawals of approval, and civil money penalties.
Published
Apr 19, 2011
'A Long Road To Normal'

Nominated again to lead The Fed, Powell tells Senate committee to expect three rate hikes, but 'if we have to raise interest rates more over time, we will.'

Regulation and Compliance
Jan 11, 2022
CFPB: Complaint Response Worsens At Big 3 Credit Bureaus

Report claims Equifax, Experian, and TransUnion routinely failed to fully respond to consumers with errors.

Regulation and Compliance
Jan 10, 2022
The Fed Names Chairs, Deputy Chairs For 12 Reserve Banks

In recent years, the Federal Reserve System has worked to increase the overall diversity of the Reserve Bank and branch boards of directors and continues to build on those efforts.

Regulation and Compliance
Jan 06, 2022
The Fed: Rate Hike Likely Coming in June

Federal Open Market Committee's December minutes reveal discussion of first hike in federal funds rate in 2Q of 2022, as well as of ending asset purchases by March.

Regulation and Compliance
Jan 05, 2022
AARMR No Protection For Savanah Scares

Conference provides opportunity for regulators to interact, discuss common topics

Regulation and Compliance
Jan 04, 2022
McCargo Sworn In As Ginnie Mae President

Former HUD official becomes the first female to lead the Government National Mortgage Association.

Regulation and Compliance
Jan 04, 2022