FHA Shuts Out Lenders RSA Financial, 1st Alliance Mortgage

FHA loansThe Federal Housing Administration has withdrawn its approval of Atlanta-based RSA Financial, Inc. and 1st Alliance Mortgage LLC of Houston, Texas – preventing the two lenders from originating and underwriting new FHA-insured mortgages.
The two lenders are also prohibited from participating in the FHA single-family insurance program.
The U.S. Department of Housing and Urban Development’s Mortgagee Review Board (MRB) also voted to impose a $15,000 civil penalty against RSA and seek $267,900 from 1st Alliance.
The MRB said HUD was misled by RSA because it was not properly licensed by the Georgia Department of Banking and Finance at the time the company submitted an application to FHA for lender approval. In addition, the MRB alleges that RSA submitted false and/or misleading information regarding the criminal conviction and sanction history of its owner and executive, Ramsey Suphi Agan.
HUD claims 1st Alliance engaged in prohibited branch arrangements, provided false certifications, failed to implement a “Quality Control Plan,” and a number 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. “If any lender can’t operate within FHA’s guidelines, they can’t do business with us.”
HUD also announced two settlement agreements with FHA-approved lenders to resolve alleged violations of HUD/FHA requirements:
Melville, New York-based Franklin First Financial, Ltd. agreed to pay a civil penalty to HUD in the amount of $413,500, and indemnify HUD for any losses which have been or may be incurred with respect to 31 FHA-insured mortgages.
St. Louis-based Paramount Bond and Mortgage Co., Inc. agreed to pay a civil penalty to HUD in the amount of $68,500, and indemnify HUD for any losses which have been or may be incurred with respect to seven FHA-insured mortgages.

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