Its Mortgagee Review Board has fined WR Starkey Mortgage $223,000 for violations of Federal Housing Administration lending requirements, according to the Department of Housing and Urban Development.
HUD also said the Plano, Texas-based lender has agreed to indemnify FHA on 32 mortgages and reimburse the federal mortgage insurance fund $756,406.76 for losses on 11 of those mortgages.
The board voted to impose these penalties on WRSM back in May. But HUD did not disclose this action until Thursday morning.
"WR Starkey had numerous loan origination and underwriting deficiencies," HUD said. The Texas lender failed to timely remit upfront mortgage insurance premiums, allowed a Credit Watch terminated branch to originate loans, failed to ensure that loans met property eligibility requirements, failed to comply with property flipping guidelines and failed to ensure that construction-to-permanent mortgage program requirements were met, the agency alleged.
HUD sent a "notice of violation" to WRSM in December 2009 that involved loans originated between March 2007 and December 2008.
The privately held company could not be reached for comment on Thursday about the civil money penalties and reimbursements ordered by HUD.
But earlier this week, WR Starkey executive vice president Brett Foster told National Mortgage News that the company has transformed itself in the last three years. "Not only are we a leader in the production of FHA loans: we are a leader in the production of quality FHA loans," he said.
