ABN Settles With HUD on FHA Underwriting

The Department of Housing and Urban Development has announced what it calls a "landmark" $41 million legal settlement with ABN Amro concerning its Federal Housing Administration underwriting practices.As of deadline time, HUD was conducting a news conference on the details of the settlement. In a press release issued before the news conference, the department said the settlement represents the "largest monetary settlement of an enforcement action in FHA's history." Industry consultant Howard Glaser said in a research note Tuesday night that the enforcement action is being taken against ABN Amro in conjunction with the Justice Department. Mr. Glaser said the action addresses faulty underwriting practices by the nation's 11th-largest lender, adding that the "underlying loans are reportedly performing assets for FHA." ABN Amro's mortgage affiliate is headquartered in Ann Arbor, Mich.