HUD Settles with FHA Lender Over Alleged Underwriting Violations

HUD  •  Mortgage

Enforcement_evergreen1On September 23, the U.S. Department of Housing and Urban Development (HUD) announced that on April 7, 2016 it had entered into a settlement with a Federal Housing Administration (FHA) approved lender over allegations that the lender violated FHA underwriting requirements.  The lender participated in HUD’s direct endorsement lender program, which authorizes private mortgage lenders to approve mortgage loans insured by the FHA.  HUD alleged that five loans underwritten by the lender failed to meet FHA underwriting requirements, and therefore the lender was liable under the Program Fraud Civil Remedies Act of 1986, 31 U.S.C. § 3801-3812.  Under the terms of the settlement, the lender agreed to pay a $110,000 civil money penalty.

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