ABN AMRO Mortgage Group, Inc. Statement: Settlement Involving FHA Insurance Certifications
ABN AMRO Mortgage Group, Inc. today issued the following statement:
ABN AMRO Mortgage Group, Inc. has reached a settlement with three government agencies – the U.S. Department of Justice, the Office of the Comptroller of the Currency (OCC) and the U.S. Department of Housing and Urban Development (HUD) – regarding past actions in connection with Federal Housing Administration (FHA) insurance certifications administered by the company on approximately 28,000 HUD-insured loans originated during the period 2000 to 2003.
It is a civil settlement with a cash payment in the amount of $16.85 million, and represents a final resolution of a matter the company discovered, investigated and self-reported to the government in 2003. In addition, the company chose not to submit insurance claims on 783 defaulted loans that were originated during the affected period, resulting in an increased cost to the company.
There was no harm or loss to borrowers or business partners. All loans were underwritten by HUD-authorized underwriters; however, the final certification process was not completed properly. A recent analysis of the repayment of the approximate 28,000 loans indicates they are performing consistently with unaffected loans originated by the company during the same time period and comparably with the average repayment performance reported by other FHA lenders. Also, because the company has corrected past conduct through improved quality controls and procedures, the settlement involves no injunctive relief, and sufficient reserves were previously set aside.
This settlement resolves a past issue. ABN AMRO Mortgage Group is committed to an FHA loan program that is in full compliance with all of the applicable requirements. The company remains steadfast in monitoring its improved controls, and does not and will not tolerate misconduct.