Given the recent debate about the FHA's overall financial condition, you'd think people would jump at the opportunity to slow down the pace of FHA-insured loans. Especially when the FHA believes they've identified a lender signing them up for loans they shouldn't be touching. However, after hearing the details of one or two twelve alleged violations Ideal Mortgage Bankers made against the FHA, a federal judge decided to dismiss the request for a temporary restraining order which would have prohibited the lender from making new FHA insured loans.
But it's probably no big deal. It's not like the alleged violations were at the very heart of the subprime crisis or anything.
The 12 alleged violations the HUD board said Ideal Mortgage Bankers made against FHA range from submitting false certifications and failing to document the borrower's income and creditworthiness, to approving loans that did not meet the FHA's minimum credit requirements and closing a loan with an excessive mortgage broker fee paid to an approved FHA loan correspondent.
So the FHA appears to be at least aware of the need for credit standards but is going to be forced to insure loans that will probably lead to further losses. You've got to give the judge credit. It's no easy feat to set the conditions necessary for Maxine Waters and Edward Pinto to both be proven correct.