State halts mortgage co.'s operations
The state has ordered a Texas-based mortgage company to stop accepting new mortgage applications from Maine consumers and to transfer pending applications to other lenders, following allegations of unsafe lending practices.
The U.S. Department of Housing and Urban Development recently suspending Allied Home Mortgage Corp.'s ability to originate or underwrite mortgages insured by the Federal Housing Administration, according to the Maine Public Broadcasting Network. Federal regulators have accused the company of engaging in unsafe practices that led to a large number of defaults. The company had a licensed branch in Scarborough until last week. Bureau of Consumer Credit Protection Superintendent William Lund said branch employees have been cooperating in efforts to transfer pending applications to other lenders.
HUD sued Allied and CEO James Hodge on Nov. 1, claiming the company's practices forced HUD to pay out millions in mortgage insurance. Allied then countersued, claiming the suspension will wipe out 70% of its business, according to Business Week.
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