WASHINGTON—Two Houston mortgage firms with common ownership have agreed to pay $84,000 in separate settlements with the HUD Mortgagee Review Board.
A mortgage brokerage firm with 200 branches nationwide, Allied Home Mortgage Capital Corp., agreed to pay a $38,000 fine to settle allegations that it violated branching rules mandated by the Federal Housing Administration.
Allied Home Mortgage Corp., a mortgage banking firm, agreed to pay a $46,000 civil monetary penalty and indemnify the FHA for losses on six loans.
Department of Housing and Urban Development auditors reviewed 252 of the 3,800 loans made by Allied Home Mortgage Corp. from July 2007 through July 2009.
Jim Hodge, who serves as CEO of both companies, said the auditors found only “minor issues” on a small number of files.
AHMCC also agreed to refund “improper fees” to two borrowers and “buy down the principal of one loan that was over-insured,” HUD said.
Acting on a tip, the HUD Inspector General’s office initiated an audit of five branches of AHMCC. The IG auditors found the firm had required five branch managers to enter into contractual arrangements for office leases, equipment contracts and utilities with Allied not consistently paying branch expenses.
“Further in one instance, Allied requested that a former employee use personnel funds to cover branch operating losses,” the February 2009 HUD IG audit report says.
FHA-approved lenders and brokerages are required to pay all branch office expenses.
Allied disagreed with the findings, providing HUD with supporting documentation, except for a “small number of accounting records for the five branch locations,” the Houston-based firm said.
“We are pleased to put this issue to rest,” Hodge said. “We believe this is an equitable settlement and any problems have been remedied to prevent this from reoccurring in the future.”
