Something Positive from the Allied Mortgage Debacle

Written By: Stacey Sprain

Something happened this week and it was big enough that I’m sure you’ve heard or read about it unless you’ve been camping out under a rock. Let me say this- Allied Home Mortgage. So you’ve heard?

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I can only imagine the water cooler conversations that have taken place in the past few days since the announcements were made of federal suits being brought against Allied Home Mortgage, it’s CEO and EVP. What’s most interesting to me is that it appears Allied originally hit HUD’s radar as far back as 2008 according to an audit report I found on the web- http://hud.gov/offices/oig/reports/files/ig0961005.pdf. According to various newswires and web articles, a former employee of the mortgage company actually “ratted out” numerous internal company procedures that were in direct violation of HUD’s requirements and regulations by calling in a hotline complaint. That information seems to be consistent with the content of audit report number 2009-FW-1005. HUD further validates the information in their press release dated November 1st at http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advi....

According to the press release, the U.S. Attorney in Manhattan filed a lawsuit against the company, Allied Home Mortgage Capital Corporation, it’s CEO and EVP on multiple charges of mortgage fraud and for violating numerous FHA requirements. In addition, HUD has suspended Allied Home Mortgage Corporation, thereby preventing the company from originating and underwriting new mortgages insured by the Federal Housing Administration (FHA) and has also suspended the company’s president and CEO, James C. Hodge with proposal to debar him and as well as the company’s EVP, Jeanne L. Stell. Government National Mortgage Association (Ginnie Mae) has also suspended the Houston-based lender’s ability to issue securities in its Mortgage-Backed Securities (MBS) program. The press release goes on to list a number of violations, some of which were originally mentioned in audit report number 2009-FW-1005, an audit of Allied that had been conducted back in 2008 by HUD.

As much as it feels good to slap a high five with fellow colleagues and celebrate that yet another mortgage competitor has “bitten the dust”, this whole thing with Allied makes me sick to my stomach. There is so much ongoing negativity with the mortgage industry and housing market, it makes me wonder if any of our jobs will ever be fun again.

But amidst all the negativity, I do find one positive for those of us at the helm of credit policy and credit risk departments, and for those who are called upon to write and enforce policies and procedures, underwrite files, audit files, comply with local state and federal rules, regulations and agency guidelines and requirements. For us, this situation with Allied Home Mortgage solidifies the importance of what we all do and exactly why we do it.

Let’s be honest- our roles aren’t easy ones. We are the people who often stand in the direct line of fire between originators and processors and their paychecks. We are looked at as ‘hard asses’ because we have to write and enforce the rules and policies that not everyone agrees with or likes to have to follow. We have to say “no” more often than we’d like and even people we adore can take it personally and hold a grudge. Often we work from sun up till sun down with very little reward. Many of us take these responsibilities to bed with us every night and those responsibilities often sleep between our spouses and our children. We are often underappreciated, undervalued, and underpaid.

But next time we get frustrated and question ourselves or allow ourselves to be questioned by others about why we write a rule or enforce a rule, we need look no further than this Allied Mortgage situation. We need to remind ourselves and others that we make and enforce the rules that allow ourselves, our families, our colleagues and their families to put food on our tables each day. We make the rules we make to protect the interests of every single individual person who is employed within our company and every single individual person who does business in any way shape or form with our company. We do what we do to make sure our borrowers are as well educated and protected as possible and that they have the best and highest quality lending experience possible. We hold ourselves personally accountable to make sure that no harm comes to the company that we and our fellow employees have all invested so much of our time and our lives in. We wear the goalie uniform that protects our CEO’s checkbook and the reputation that he or she worked so hard to build from the ground up.

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When reading or hearing about situations like the one that is occurring with Allied Mortgage, we should all take pride in knowing that what we do each and every day really can and DOES make a difference for our respective companies. If not for those of us who write and enforce the rules that nobody likes, it could be our own company’s name and not that of Allied Mortgage the ends up as the topic of conversations at water coolers across the county!


About The Author

Stacey Sprain - As an NAMP® staff writer, Ms. Stacey Sprain is currently a NAMP® member in good standing, and is a NAMP® Certified Ambassador Loan Processor (NAMP®-CALP). With over 15+ years of mortgage banking experience, Stacey is also a Quality Control Manager for a major mortgage lending institution. If you would like to become a volunteer writer for us, please email us at: contact@mortgageprocessor.org.


Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.