Prospect Mortgage Announces Settlement with HUD
SHERMAN OAKS, Calif., July 12, 2011 /PRNewswire/ -- Prospect Mortgage has reached a settlement with the U.S. Department of Housing and Urban Development (HUD) regarding concerns HUD had raised with the structure and operation of Prospect’s business partnerships involving joint ventures with real estate firms and other companies in the real estate industry.
HUD expressed concerns under the Real Estate Settlement Procedures Act (RESPA) about several of Prospect's joint ventures, as well as the company's use of a limited liability corporation (LLC) structure for FHA lending. HUD did not raise concerns regarding the loan quality or lending practices of Prospect, which ranks as one of the nation’s top-10 FHA originating lenders and surpasses the industry’s loan quality average as evidenced by its low compare score.
“The mortgage industry has been rocked by intense regulatory and market changes in the last few years, and so it’s no surprise that business partnerships between lenders and other companies have also been significantly affected and will continue to be impacted,” said Ron Bergum, Prospect’s Chief Executive Officer. “Although the Series LLC model is currently being used by several of our competitors and has been widely promoted in our industry for more than a decade, we respect the change in direction signaled by HUD.”
“As an industry leader, Prospect is committed to excellence and integrity in all aspects of our business. We have been proactive and cooperative with HUD throughout this review process. We are in complete alignment with HUD’s mission and remain flexible to adjust to the ever-changing regulatory environment,” Mr. Bergum said. “It seems that the Dodd-Frank initiatives will result in a very fluid regulatory environment for a period of time, and as a responsible lender, we intend to embrace whatever changes that may come from policy changes. In the end, they are designed to improve the mortgage lending experience for consumers and increase responsible homeownership in America.”
Prospect Mortgage is among the nation's top-10 FHA lenders and top-five Fannie Mae HomePath® retail REO lenders, and is the third largest 203K renovation lender in the United States. Prospect Mortgage is headquartered in Sherman Oaks, California.
For more information about Prospect Mortgage, visit www.MyProspectMortgage.com.
SOURCE Prospect Mortgage