A Houston mortgage brokerage firm with 200 branches nationwide said it agreed to pay a $38,000 fine to settle alleged violations of Federal Housing Administration branching rules.
Allied Home Mortgage Capital Corp. of Texas has a monthly production run rate of up to $250 million with 60% of its originations being FHA insured.
Acting on a tip, auditors from the Department of Housing and Urban Development Inspector General's office found that Allied required branch managers at five locations to enter into contractual arrangements for office leases, equipment contracts and utilities. HUD says Allied did not consistently pay branch expenses.
"Further, in one instance, Allied requested that a former employee use personal funds to cover branch operating losses," the February 2009 HUD IG audit report says.
The corporate headquarters of FHA-approved lenders and brokerages are required to pay all branch office expenses.
Allied disagreed with the IG's findings and provided HUD with supporting documentation, except for a "small number of accounting records for the five branch locations," the Houston-based firm said.
So it agreed to pay a $38,000 civil money penalty.
"We are pleased to put this issue to rest," said AHMCC chief executive Jim Hodge said. "We believe this is an equitable settlement and any problems have been remedied to prevent this from reoccurring in the future."
AHMCC is affiliated with Allied Home Mortgage Corp., a Fannie Mae and Freddie Mac seller/servicer.
