The Federal Housing Administration has fined a Brookline, Mass., lender $72,500 and ordered the firm to reimburse the agency for past insurance claims.
First American Mortgage Trust also agreed to indemnify FHA for potential losses on five loans if they default over the next 60 months.
The federal mortgage insurance agency said it discovered that FAMT "refinanced loans for borrowers with serious credit delinquencies without properly analyzing the households' ability to manage credit."
When contacted by National Mortgage News, a First American executive said the company would have no comment.
FHA's Neighborhood Watch data base shows that FAMT has originated 146 FHA-insured single-family loans in the last two years and 10% are seriously delinquent.
