Two more lenders fell victim to the FHA’s ongoing campaign to remove bad players from the mortgage market.
Last week, it permanently withdrew approval for Atlanta-based RSA Financial and 1st Alliance Mortgage LLC of Houston, Texas.
FHA lending seems to be the only game in town these days, so the move could lead to their eventual demise.
RSA Financial was cited for providing misleading information to the HUD regarding its licensing; there was also the matter of criminal history tied to one of its executives.
1st Alliance was cited for participation in prohibited branch arrangements, providing false certifications, failing to implement a Quality Control Plan, and a bevy of other violations of HUD/FHA standards.
“If lenders want to do business with the FHA, it’s critical that they provide complete and truthful information so that we can properly determine who we’re dealing with,” said FHA Commissioner David Stevens, in a statement on the HUD website.
“If any lender can’t operate within FHA’s guidelines, they can’t do business with us.”
The FHA has also announced a number of policy changes, including higher credit score requirements and mortgage insurance premiums, along with reduced seller concessions to prevent appraisal-related fraud.