On April 4, 2017, the Mortgagee Review Board (MRB) of the U.S. Department for Housing and Urban Development (HUD) published an entry in the Federal Register titled "Mortgagee Review Board: Administrative Actions." The entry describes 25 separate administrative actions the MRB took against various lenders and servicers from October 1, 2015, to September 30, 2016. In addition, the notice lists 106 lenders who were required to pay a civil money penalty for allegedly failing to meet their annual recertification requirements. In addition, the MRB withdrew FHA approval from another 147 lenders who allegedly failed to meet the annual recertification requirements. These actions confirm the recent perceived uptick in MRB enforcement activity.

The MRB actions covered a wide range of alleged conduct. Some of the allegations applied to only one or two loans in the lender or servicer's (often large) portfolio. They included things like:

• False certification as to compliance with HUD/FHA regulations
• Failure to notify HUD about state enforcement actions
• Failing to use correct branch identification numbers in originating certain mortgages
• Failure to perform quality control reviews on certain defaulted loans
• Failing to address "appraisal deficiencies" in certain loan applications
• Failing to notify HUD of acquisitions or mergers
• Failing to adequately document source of closing funds for certain borrowers
• An accounting error resulting from including two loans as assets on the wrong year's balance sheet
• Employing a bank manager who had been indicted for bank fraud
• "Improper" loan servicing
• Failing to properly engage in loss mitigation on certain loans
• Failing to timely disburse escrow funds
• Improperly charging fees to certain borrowers
• Failing to check the excluded parties list system before approving borrowers for HAMP modifications
• Sending outdated information to borrowers in connection with loan modifications
• Using faxed copies of documents in underwriting after failing to obtain the originals or validating the documents' authenticity
• Entering an incorrect social security number in the Credit Alert Verification Reporting System when checking a borrower's credit

The fines and penalties for these violations ranged from as little as $3,500 all the way to $113 million. The larger penalties were generally obtained as part of settlements between the lenders or servicers and other federal agencies such as the Department of Justice. The nature of the violations at issue and the size of the penalties highlight the MRB's continued focus on both loan- and institution-level compliance with applicable HUD and FHA regulations.