HUD Bans Mortgage Lender from Originating FHA-Insured Loans Because of False Financial Statements

FHA  •  HUD  •  Mortgage

​On July 11, 2017, the United States Department of Housing and Urban Development (HUD) announced​ that its Mortgagee Review Board had suspended a national mortgage lender from originating and underwriting new mortgages insured by the Federal Housing Administration (FHA).  ​HUD’s Departmental Enforcement Center also banned the lender’s owner from doing business with the federal government.

According to HUD, the lender submitted financial statements to HUD that falsely certified that the statements were audited by an independent accounting firm.  HUD alleged that the lender and its owner engaged in a multi-year scheme of submitting false financial statements to HUD​. ​ HUD referred the matter to its Mortgagee Review Board, which has administrative authority to suspend lenders from participation in the FHA program if the lender fails to ​​comply with FHA requirements.

This is the third HUD enforcement action concerning the FHA loan program covered by Enforcement Watch this year. The first two actions are available here and here​.

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