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Dallas-based lender withdrawn for serious and repeated violations of FHA standards

WASHINGTON, DC – March 26, 2012 – (RealEstateRama) — The U.S. Department of Housing and Urban Development’s Mortgagee Review Board (MRB) today announced that it is immediately and permanently withdrawing approval for AmericaHomeKey, Inc. (AHK)to originate and underwrite new mortgages insured by the Federal Housing Administration (FHA).   In addition, the MRB is imposing $268,000 in penalties against the Dallas-based mortgage lender for repeated and serious violations of FHA requirements.

“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,” said Acting FHA Commissioner Carol Galante.  “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.”

Among more than a dozen violations of FHA standards, the MRB found AHK:

  1. Failed to adequately document the source and/or adequacy of borrowers’ funds used for closing;
  2. Failed to correctly calculate or adequately document borrowers’ income;
  3. Failed to verify the stability of borrowers’ income;
  4. Failed to ensure borrowers were eligible for an FHA-insured mortgage loan;
  5. Failed to ensure the property met eligibility requirements;
  6. Failed to comply with HUD’s property flipping requirements, including a case involving a property purchased for $14,100 that was resold approximately three months later for $125,000; and;
  7. Charged borrowers unallowable fees.

The Government National Mortgage Association, commonly known as Ginnie Mae, also terminated AHK as an approved issuer, though AHK was not an active participant in the Ginnie Mae program having never issued Ginnie Mae securities in the past.

The action against AHK announced today is the result of HUD’s ongoing effort to hold the mortgage industry accountable for the loans they originate, underwrite and/or service.  Read more about HUD’s Mortgagee Review Board.


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Brian Sullivan
(202) 402-7527