State Orders Lender to Cease Taking Applications and Transfer Pending Mortgage Files

GARDINER, Maine – The Bureau of Consumer Credit Protection has ordered Texas-based Allied Home Mortgage Corporation to cease accepting new mortgage applications from Maine consumers, and to transfer pending applications to other licensed lenders.

The action is a result of Tuesday’s decisions by the U.S. Department of Housing and Urban Development (HUD) and Government National Mortgage Association (“Ginnie Mae”) to suspend Allied’s ability to originate or underwrite mortgages insured by the Federal Housing Administration (FHA). The Texas corporation is accused by federal authorities of unsafe lending practices leading to large numbers of defaults and forcing HUD to pay out millions of dollars in mortgage insurance.

The company maintained a licensed branch location in Scarborough, Maine. The office closed this week and most of the 7 employees plan to affiliate with another licensed lender or loan broker.

“We took this action in order to protect Maine’s consumers and prevent the company from accepting applications for mortgages that will likely not materialize,” Bureau Superintendent William N. Lund stated.

Lund said his office has been working with the principals of the Scarborough office this week to place pending applications with other lenders. “The loan originators at the local office have cooperated completely,” Lund commented. “They have provided a full report of all loans in the pipeline, and have provided updates several times each day.”

Licensed lenders must post a surety bond with the Bureau, and the proceeds would be available to compensate borrowers for provable losses as a result of the closing of the company. Any Maine consumers with questions about their pending applications or mortgage loans with Allied Home Mortgage Corporation can contact the Bureau of Consumer Credit Protection at 1-800-332-8529 for more information.

 

The Bureau of Consumer Credit Protection is part of Maine’s Department of Professional and Financial Regulation. The Bureau licenses lenders, creditors and collectors; conducts periodic examinations of creditors to determine compliance with state laws; and responds to consumer complaints and inquiries. The Office also conducts educational seminars to advise consumers and creditors of their legal rights and responsibilities.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: