R&G Reports Ginnie Default Notification

Ginnie Mae has declared R&G Mortgage Corp. in default under its guaranty agreements as a result of the previously announced withdrawal of R&G's status as a HUD/FHA-approved lender by the Department of Housing and Urban Development, according to R&G Financial Corp., the company's San Juan, Puerto Rico-based parent company.The notification by Ginnie Mae said R&G Mortgage will lose its authority to act as a Ginnie Mae issuer and a servicer of Ginnie mortgage pools within 30 days, and that it may not issue additional Ginnie Mae-guaranteed mortgage-backed securities unless approved by Ginnie Mae. (R&G reported recently that it is currently unable to originate loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs because of the company's failure to submit timely audited financial statements.) The parent company said R&G Mortgage would file an appeal with HUD, and that its subsidiary R-G Premier Bank would apply to be licensed as a HUD/FHA-approved lender. R&G can be found on the Web at http://www.rgonline.com.