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FHA Issues
Sanctions Against 120 Lenders
If you're considering an FHA home loan, it's a good idea to check
out the FHA's list of 120 financial institutions recently sanctioned
for violating FHA
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| rules. While the majority of FHA-approved lenders
are reputable companies, the recent sanctions reveal some bad apples
trying to take advantage of both the consumer and the FHA. The FHA
issued sanctions for a variety of problems--everything from bad
quality control to falsifying documents used to issue FHA home loans.
FHA mortgages are designed with specific rules to allow both the
banks and borrowers alike to reap benefits from FHA-insured loans.
When those rules are broken or ignored, sometimes it takes the FHA
time to catch up with the violators. That's because the FHA has
standard periods of review for its lenders--if the financial institution
passed their review for one year, but began violating FHA standards,
evidence could surface only through complaints or by catching an
unscrupulous lender red-handed. Otherwise, violations may go undetected
until the next review.
When that review does happen, FHA officials don't waste any time
punishing those who flaunt the rules. The recent sanctions issued
against those 120 lenders include a wide range of punishments--from
fines in some cases, to revoking FHA approval where appropriate.
That's what happened in the case of the Houston, Texas-based Gatewood
Mortgage Corporation; among other violations FHA reviewers found
falsified documents and violation of FHA approval guidelines. There
were plenty of other violations (detailed in a Department of Housing
and Urban Development press release), the end result being that
Gatewood Mortgage Corporation lost its FHA approved lender status.
The FHA official website stresses that in all of the 120 cases,
sanctions were issued as the result of routine reviews. In spite
of some news sources description of these cases as a "crackdown",
in every case the 120 lenders who received sanctions were punished
because of the scheduled review process rather than a special task
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Administration
Releases March Loan Modification Report
Homeowners Have Saved a Cumulative $3 Billion Under HAMP to Date
WASHINGTON - The U.S. Department of the Treasury
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and the Department of Housing and Urban
Development today released March data for the Administration’s
Home Affordable Modification Program (HAMP). As of the end of the
month, more than 1.4 million homeowners received offers for trial
modifications, and more than 1.1 million borrowers were receiving
a median savings of $500 each month. Permanent modifications have
been granted to more than 230,000 homeowners, and an additional
108,000 permanent modifications have been approved by servicers
and are pending only borrower acceptance. Homeowners’ lower
monthly mortgage payments under HAMP represent a cumulative savings
of more than $3 billion.
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Coalition
Launches New Campaign to Fight Loan Modification Scams
Washintgon, DC – The Loan Modification Scam Prevention Network,
led by Fannie Mae, Freddie Mac (NYSE:FRE), the Lawyers'
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and NeighborWorks America, today announced a national campaign to
prevent loan modification scams through public education, complaint
reporting and coordination with local, state, and federal enforcement
agencies.
As part of the campaign, the Network launched a consumer-friendly
Website, www.PreventLoanScams.org , which supports national, state
and local law enforcement efforts. The Website serves as a nationwide
clearinghouse and destination for loan modification scam information
on complaints filed, laws and regulations, and enforcement actions.
The Website includes: An electronic complaint form that can be
filled out easily by an individual who has been scammed or by counselors
or friends helping a victim of fraud;
Names of individuals and organizations who have been identified
by enforcement agencies to have allegedly committed a loan modification
scam;
Information on how to avoid a loan modification scam;
State-by-state information about rules, regulations and resources
available to homeowners; and
News and information on enforcement efforts.
Homeowners who believe they may have been a victim of a loan modification
scam, can also call the Homeowners Hope Hotline at 888-995-HOPE
to log a complaint and to receive free foreclosure prevention counseling.
"We've joined forces with government agencies and other industry
leaders to help fight loan scams across the country," said
Jeff Hayward, Senior Vice President, Fannie Mae. "This effort
links homeowners to free, legitimate counseling and helps to put
scammers out of business. The goal of this campaign is to educate
homeowners and empower those who have fallen victim to scammers
to report and prevent future fraud."
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