The HUD Office of the Inspector General (OIG) issued subpoenas to 15 companies on Tuesday, including three Texas lenders. The investigation is focusing on mortgage companies with significant claim rates against the Federal Housing Administration mortgage insurance program.
The three Texas lenders subpoenaed are:
Alethes LLC, Lakeway, TX
Alacrity Financial Services, LLC, Southlake, TX
Americare Investment Group, Inc., Arlington, TX
HUD’s Neighborhood Watch/Early Warning System shows that these three lenders have a combined 808 loans in default or in the FHA claim process, representing a 15% default rate. The statewide default rate of FHA loans is 4.6%.
We encourage the OIG to investigate why these lenders are making loans that systematically fail. Safeguards such as the HUD OIG system are important to ensuring that government insurance programs like the FHA program are not taken advantage of by lenders who make bad loans.
(h/t Calculated Risk)