The Inspector General's Office of HUD wants WR Starkey Mortgage to reimburse the Federal Housing Administration $360,000 for actual losses on four loans where downpayment assistance was arranged by an entity that was not a registered charitable organization.
The privately held nonbank claims it should not be responsible for a $110,600 loan because the default was not due to deficiencies cited by HUD IG auditors in a recent report.
"The company acknowledges the audit's remaining findings," WRSM says in a written response to the HUD IG report.
The Plano, Texas-based lender said it has taken corrective actions to address underwriting problems FHA identified back in 2008. "This company has transformed itself in the last three years," said WRSM executive vice president Brett Foster. "Not only are we a leader in the production of FHA loans: we are a leader in the production of quality FHA loans," he told National Mortgage News.
WRSM has originated 14,300 FHA-insured loans since December 2008. This two-year book of business has a 2.04% serious delinquency and claims rate. The national average for all FHA lenders is 2.91%.
Earlier this year the lender agreed to indemnify FHA for losses on 14 manufactured housing loans reviewed by IG auditors.
