The Department of Housing and Urban Development (HUD) late Monday suspended Equitable Trust Mortgage Corp. (ETMC) of Baltimore from making Federal Housing Administration (FHA)-backed loans — the second such suspension of a lender within a week.
ETMC, which has branches in Maryland, Virginia, and South Carolina, told National Mortgage News it will make a statement on the matter later in the day Tuesday. Its specialty is renovation financing. For now, the suspension is for a minimum of six months.
HUD alleges that the nonbank lender charged excessive origination fees to minority borrowers and others. In some cases, the company charged borrowers a broker fee and an additional 1% origination fee, HUD said.
"ETM received excessive compensation and improperly charged consumers duplicative and unreasonable fees to originate their loans," HUD noted. It originated nearly 2,250 FHA-insured loans over the past two years, 8% of which are in default.
It has filed only 8 claims. HUD's Office of Inspector General also is investigating ETMC's lending practices.
Last week HUD suspended Lend America of Long Island, which, a few days later, laid off most of its workforce.