Issue Date
July 14, 2008
Audit Report Number
2008-LA-1013
TO: Brian D. Montgomery, Assistant Secretary for Housing, Federal Housing
Commissioner, H
Henry S. Czauski, Acting Director, Departmental Enforcement Center, CV
FROM: Joan S. Hobbs, Regional Inspector General for Audit, Region IX, 9DGA
SUBJECT: First Magnus Financial Corporation Violated the Real Estate Settlement
Procedures Act When Paying Incentives to Brokers for Generating Federal
Housing Administration Mortgages
HIGHLIGHTS
What We Audited and Why
We audited the mortgage origination and business practices of the First Magnus
Financial Corporation’s (First Magnus) corporate office in Tucson, Arizona. The
objective of the audit was to determine whether First Magnus violated U.S.
Department of Housing and Urban Development (HUD) requirements by paying
its brokers volume-based incentives for originating and processing Federal
Housing Administration (FHA) mortgages.
What We Found
First Magnus violated the Real Estate Settlement Procedures Act (RESPA) when
it paid quality incentives, also known as volume-based incentives, to brokers for
originating and processing FHA mortgages.
What We Recommend
We recommend that HUD’s Assistant Secretary for Housing require First
Magnus, for any current or future FHA mortgage operations for which First
Magnus may exercise management control, to ensure that the practice of issuing
incentive payments to brokers for originating and processing FHA mortgages is
discontinued. Also, we recommend that First Magnus have their active status and
approval to perform FHA business removed. Finally, we recommend that the
HUD’s Acting Director for the Departmental Enforcement Center pursue
administrative actions against the principal owners and management of First
Magnus for allowing the improper practice of issuing incentive payments to
brokers for originating and processing FHA mortgages.
For each recommendation without a management decision, please respond and
provide status reports in accordance with HUD Handbook 2000.06, REV-3.
Please furnish us copies of any correspondence or directives issued because of the
audit.
Auditee’s Response
We discussed the report’s contents with responsible HUD officials, and their
views were considered. Due to the closure of First Magnus and its subsequent
bankruptcy, we were unable to obtain a formal response from the auditee.
However, the finding in this report was discussed with First Magnus officials
during the audit, and their views were also considered in preparing the report.
2
TABLE OF CONTENTS
Background and Objective 4
Results of Audit
Finding 1: First Magnus Violated the RESPA When Paying Incentives to 5
Brokers for Generating FHA Mortgages
Scope and Methodology 9
Internal Controls 10
Appendix
A. Schedule of Quality Incentive Payments 11
3
BACKGROUND AND OBJECTIVE
Background
First Magnus was a wholesale lender that was incorporated and approved by HUD as a
nonsupervised lender in 1996. Its corporate office was located in Tucson, Arizona. As of June
30, 2008, First Magnus had 13 active branch offices and sponsored 1,961 FHA-approved loan
correspondents. As a wholesale lender, First Magnus underwrote and funded mortgages received
by its loan correspondents and other brokers.
First Magnus operated First Magnus Lender Services, which provided the following services to
its customers: full-service credit reporting, flood determination, appraisals, full-service
insurance, and title/escrow. In addition, First Magnus operated Charter Funding (Charter), the
retail-lending arm of the mortgage company. Charter’s corporate office was located in Tucson,
Arizona. Charter had affiliates in Arizona that provided the following services to its customers:
appraisals, insurance, credit reporting, and title/escrow.
During the period January 1, 2003, and December 31, 2005, First Magnus’ Tucson corporate
office issued $102,840 in quality incentives or bonuses to brokers for originating and processing
326 federally related mortgages (non-FHA-insured and FHA-insured) totaling more than $48
million. Of the payments made to brokers, $58,571 in quality incentives was paid for originating
and processing 169 FHA-insured mortgages totaling more than $24 million for First Magnus.
First Magnus Filed for Bankruptcy
On August 16, 2007, the state of Arizona Department of Financial Institutions suspended First
Magnus’ Arizona mortgage banker license. On August 21, 2007, First Magnus closed and filed
for Chapter 11 1 bankruptcy. Therefore, this report is being addressed to HUD since First
Magnus has closed its doors and is unavailable to respond to the report.
Objective
Our objective was to determine whether First Magnus violated HUD requirements by paying its
brokers volume-based incentives for originating and processing FHA mortgages.
1
Named after the U.S. bankruptcy code 11 entitled Reorganization, Chapter 11 bankruptcy is ordinarily used by
commercial enterprises that desire to continue operating a business and repay creditors concurrently through a court-
approved plan of reorganization.
4
RESULTS OF AUDIT
Finding 1: First Magnus Violated the RESPA When Paying Incentives
to Brokers for Generating FHA Mortgages
First Magnus paid brokers $58,571 in quality incentives, also known as volume-based incentives,
to originate and process more than $24 million in FHA mortgages for the lender. It disregarded
HUD rules and requirements when originating and processing FHA mortgages. Specifically, the
mortgage company violated RESPA, which prohibits any inducements associated with the
origination and processing of FHA mortgages. RESPA was created to prevent companies
associated with the real estate industry from engaging in improper business practices that would
have negatively affected buyers’ housing related transactions such as obtaining a mortgage and
purchasing a home. For example, First Magnus executed agreements with brokers that required
them to originate and process a certain number of mortgages in exchange for a predetermined
fee. The intent of the agreements was to reward brokers based on the volume of mortgages
originated and processed within a designated month. As a result, this improper practice raised
concerns that brokers were not practicing due diligence in ensuring that homebuyers received
mortgages that were appropriate for their housing purchasing needs.
First Magnus Issued Quality
Incentives to Brokers for
Originating and Processing
FHA Mortgages
During the period January 1, 2003, to December 31, 2005, First Magnus issued 22
payments, totaling $58,571 in quality incentives or bonuses, to seven brokers for
originating and processing 169 FHA-insured mortgages totaling more than $24
million for First Magnus (see appendix A). The practice of paying brokers
incentives for originating and processing FHA mortgages violates RESPA.
RESPA states that in determining whether the compensation paid to a mortgage
broker is reasonably related to goods or facilities actually furnished or services
actually performed, HUD will consider all compensation, including any volume-
based compensation. RESPA goes on to state that there may be no payments
merely for referrals of business. In addition, HUD generally has held that when
the payment is based on the volume or value of business transacted, it is evidence
of an agreement for the referral of business, unless it is shown that payments are
for legitimate business reasons unrelated to the value of the referrals. Regulations
at 24 CFR (Code of Federal Regulations) 3500.14(b) of RESPA state that no
person shall give and no person shall accept any fee, kickback, or thing of value
pursuant to any agreement or understanding, oral or otherwise, that business
5
incident to or part of a settlement service involving a federally related loan, or a
FHA mortgage, shall be referred to any person.
First Magnus established a Quality Incentive program that rewarded brokers for
originating and processing mortgages (e.g., FHA, U.S. Department of Veterans
Affairs (VA), conventional, etc.). Brokers entered into either verbal or written
agreements with First Magnus to participate in the program. Both types of
agreements followed the same objective of rewarding brokers for mortgage
volume generated for First Magnus. Brokers were rewarded based on either a
percentage point of the mortgage volume generated or through a tiered bonus
system. For the period reviewed, it appeared that the percentage point system was
the most commonly used method to reward brokers for mortgages generated.
Under the percentage point system, First Magnus paid its brokers a percentage
point of the mortgage volume (e.g. FHA, VA, conventional, and niche product
loans) processed and originated on a monthly basis. The agreed-upon percentage
point paid ranged from .125 percent to .25 percent of mortgage volume generated
by the broker during the month. For example, in December 2003, First Magnus
paid a broker $1,122 in quality incentives for processing and originating four
mortgages totaling $448,981. As part of the agreement, the broker received .25
percent of the $448,981 in mortgage volume generated, or $1,122 ($448,981
times .25 percent).
Under the tiered bonus system, First Magnus paid its brokers incentives based on
mortgage volume earned per millions in dollars generated for the month. Brokers
received bonuses using the following monetary criteria:
Volume Earned incentives
$0 - $999,999 $0
$1 million $500
$1,000,001 - $3 million $2,000
$3,000,001 - $5 million $3,000
$5,000,001 - $10 million $8,000
$10,000,001 and over 2 $0
For example, in May 2004, a broker received $2,500 in incentives for mortgage
volume totaling more than $1 million. Using the tiered bonus chart above, the
broker received $500 for the first $1 million in mortgage volume and another
$2,000 for the remaining mortgage volume within the $1,000,001 to $3 million
range.
Discussions with various First Magnus regional managers revealed that quality
incentives were issued to brokers based on mortgage volume, not the type of
mortgage originated and processed. All mortgages (e.g., FHA, VA, conventional,
2
Under the Quality Incentive program, brokers did not receive incentives for mortgage volume that exceeded
$10,000,001.
6
etc.) were treated equally, with no particular type of mortgage receiving a higher
incentive than another.
Conclusion
From the information reviewed, we concluded that First Magnus’ practice of
paying brokers in exchange for volume of FHA mortgages originated and
processed was evidence of an agreement for referral of business from brokers to
the lender. First Magnus appeared to pay brokers incentives for originating and
processing FHA mortgages on a nationwide basis. As a result, First Magnus
violated RESPA by issuing volume-based incentive payments to brokers in
exchange for originating and processing FHA mortgages. The RESPA violation
applies to federally related mortgages, including FHA-insured mortgages.
First Magnus’ practice exposed HUD’s insurance fund to unnecessary risk due to
brokers’ originating and processing FHA mortgages based on volume, without
ensuring due diligence that the homebuyer received a mortgage that was
appropriate for their needs. Accordingly, HUD should require that all current and
future practices of issuing incentive payments to brokers for originating and
processing FHA mortgages be discontinued. Also, we recommend that First
Magnus have their active status and approval to perform FHA business removed.
Finally, we recommend that HUD pursue administrative actions against the
principal owners and management of First Magnus for allowing the improper
practice of issuing incentive payments to brokers for originating and processing
FHA mortgages.
Recommendations
We recommend that the Assistant Secretary for Housing-Federal Housing
Commissioner
1A. Require First Magnus to discontinue the practice of issuing incentive
payments to brokers for originating and processing FHA mortgages should
it continue to perform FHA business.
1B. Remove the active status and approval for First Magnus to perform FHA
business.
7
We recommend that the Acting Director for the Departmental Enforcement
Center
1C. Pursue administrative action against the principal owners and management
of First Magnus for allowing the improper practice of issuing incentive
payments to brokers for originating and processing FHA mortgages.
8
SCOPE AND METHODOLOGY
We performed audit work from October 2005 through May 2006. The audit period covered
January 2003 through December 2005.
To accomplish our objective, we
• Interviewed First Magnus employees,
• Interviewed employees from other mortgage companies,
• Interviewed state and federal government agency employees,
• Reviewed First Magnus financial records, and
• Reviewed public records and databases.
We performed our review in accordance with generally accepted government auditing standards.
9
INTERNAL CONTROLS
Internal control is an integral component of an organization’s management that provides
reasonable assurance that the following objectives are being achieved:
• Effectiveness and efficiency of operations,
• Reliability of financial reporting,
• Compliance with applicable laws and regulations, and
• Safeguarding of assets.
Internal controls relate to management’s plans, methods, and procedures used to meet its
mission, goals, and objectives. Internal controls include the processes and procedures for
planning, organizing, directing, and controlling program operations. They include the systems
for measuring, reporting, and monitoring program performance.
Relevant Internal Controls
We determined the following internal controls were relevant to our audit objectives:
• Reliability of mortgage documents used to approve FHA-insured mortgages.
• Origination and processing of FHA-insured mortgages in compliance with
HUD rules and regulations.
• Safeguarding FHA-insured mortgages from high risk exposure.
We assessed the relevant controls identified above.
A significant weakness exists if management controls do not provide reasonable
assurance that the process for planning, organizing, directing, and controlling
program operations will meet the organization’s objectives.
Significant Weaknesses
Based on our review, we believe the following item is a significant weakness:
• First Magnus disregarded applicable HUD rules and regulations when it paid
brokers volume-based incentives for originating and processing FHA
mortgages.
10
APPENDIX
Appendix A
SCHEDULE OF QUALITY INCENTIVES PAYMENTS
Broker Payment Date FHA Mortgage Quality
Number Amount Incentive
Earned
1 Greentree Mortgage June 24, 2005 249-4994862 $267,452.00 $669.00
2 Greentree Mortgage June 24, 2005 351-4687966 $181,989.00 $455.00
3 Greentree Mortgage June 24, 2005 381-7530960 $89,218.00 $223.00
4 Greentree Mortgage June 24, 2005 381-7569302 $140,646.00 $352.00
5 Greentree Mortgage June 24, 2005 481-2497865 $75,516.00 $189.00
6 Greentree Mortgage June 24, 2005 541-7176844 $161,168.00 $403.00
7 Greentree Mortgage June 24, 2005 351-4690790 $89,162.00 $223.00
8 Greentree Mortgage June 24, 2005 352-5369016 $182,990.00 $457.00
9 Greentree Mortgage June 24, 2005 441-7565428 $220,964.00 $552.00
10 Greentree Mortgage June 24, 2005 351-4653332 $125,861.00 $315.00
11 Greentree Mortgage June 24, 2005 381-7592393 $95,773.00 $239.00
12 Greentree Mortgage June 24, 2005 352-5361137 $284,707.00 $712.00
13 Greentree Mortgage June 24, 2005 351-4688535 $155,769.00 $389.00
14 Greentree Mortgage June 24, 2005 351-4692450 $137,367.00 $343.00
15 Greentree Mortgage June 24, 2005 351-4692444 $114,783.00 $287.00
16 Greentree Mortgage June 24, 2005 352-5366481 $200,970.00 $502.00
17 Greentree Mortgage June 24, 2005 105-2220764 $92,474.00 $231.00
18 Greentree Mortgage June 24, 2005 137-3186308 $140,845.00 $352.00
19 Greentree Mortgage June 24, 2005 441-7626402 $109,149.00 $273.00
20 Greentree Mortgage June 24, 2005 351-4695860 $198,432.00 $496.00
21 Greentree Mortgage June 24, 2005 374-4456397 $293,070.00 $733.00
22 Greentree Mortgage June 24, 2005 351-4693780 $145,078.00 $363.00
23 Greentree Mortgage June 24, 2005 351-4694661 $130,970.00 $327.00
24 Greentree Mortgage June 24, 2005 381-7591687 $130,530.00 $326.00
25 Greentree Mortgage June 24, 2005 137-3191366 $140,500.00 $351.00
26 Greentree Mortgage June 24, 2005 381-7566249 $115,090.00 $288.00
27 Greentree Mortgage June 24, 2005 071-0995574 $188,411.00 $471.00
28 Greentree Mortgage June 24, 2005 441-7636337 $101,804.00 $255.00
29 Greentree Mortgage June 24, 2005 351-4694530 $127,170.00 $318.00
30 Greentree Mortgage June 24, 2005 351-4690148 $124,010.00 $310.00
31 Greentree Mortgage June 24, 2005 281-3154780 $63,845.00 $160.00
32 Greentree Mortgage June 24, 2005 441-7624453 $77,647.00 $194.00
33 Greentree Mortgage June 24, 2005 351-4687683 $129,920.00 $325.00
34 Greentree Mortgage June 24, 2005 351-4686143 $131,036.00 $328.00
35 Greentree Mortgage June 24, 2005 381-7582417 $87,797.00 $219.00
11
Broker Payment Date FHA Mortgage Quality
Number Amount Incentive
Earned
36 Greentree Mortgage June 24, 2005 381-7594914 $112,517.00 $281.00
37 Greentree Mortgage June 24, 2005 381-7352016 $158,500.00 $396.00
38 Greentree Mortgage June 24, 2005 351-4693427 $140,188.00 $350.00
39 Greentree Mortgage June 24, 2005 352-5367934 $266,691.00 $667.00
40 Greentree Mortgage June 24, 2005 137-3192072 $113,760.00 $284.00
41 Greentree Mortgage June 24, 2005 352-5371656 $257,302.00 $643.00
42 Greentree Mortgage June 24, 2005 541-7224904 $153,772.00 $384.00
43 Greentree Mortgage June 24, 2005 381-7478825 $147,050.00 $368.00
44 Greentree Mortgage June 24, 2005 105-1772589 $138,825.00 $347.00
45 Greentree Mortgage June 24, 2005 249-4975886 $192,607.00 $482.00
46 Greentree Mortgage June 24, 2005 441-7640456 $122,782.00 $307.00
47 Greentree Mortgage June 24, 2005 441-7638787 $121,769.00 $304.00
48 Greentree Mortgage June 24, 2005 441-7638872 $162,907.00 $407.00
49 Greentree Mortgage June 24, 2005 541-7235291 $203,355.00 $508.00
50 Greentree Mortgage June 24, 2005 105-2145937 $112,157.00 $280.00
51 Greentree Mortgage June 24, 2005 352-5379042 $222,500.00 $556.00
52 Greentree Mortgage June 24, 2005 351-4697391 $217,122.00 $543.00
53 Greentree Mortgage June 24, 2005 351-4702485 $88,240.00 $221.00
54 Greentree Mortgage June 24, 2005 441-7640150 $112,638.00 $282.00
55 Greentree Mortgage June 24, 2005 351-4702541 $221,270.00 $553.00
56 Greentree Mortgage June 24, 2005 352-5371078 $198,577.00 $496.00
57 Greentree Mortgage June 24, 2005 105-2283437 $91,000.00 $228.00
58 Greentree Mortgage June 24, 2005 351-4697385 $235,250.00 $588.00
59 Greentree Mortgage June 24, 2005 351-4694179 $130,935.00 $327.00
60 Greentree Mortgage June 24, 2005 351-4703565 $84,904.00 $212.00
61 Greentree Mortgage June 24, 2005 352-5378791 $180,899.00 $452.00
62 Greentree Mortgage June 24, 2005 441-7639015 $150,118.00 $375.00
63 Greentree Mortgage June 24, 2005 441-7639622 $96,932.00 $242.00
64 Greentree Mortgage June 24, 2005 261-8903353 $138,040.00 $345.00
65 Greentree Mortgage June 24, 2005 105-2260842 $174,275.00 $436.00
66 Greentree Mortgage June 24, 2005 381-7603234 $111,548.00 $279.00
67 Greentree Mortgage June 24, 2005 381-7568450 $166,255.00 $416.00
68 Greentree Mortgage June 24, 2005 483-3520059 $144,359.00 $361.00
69 Greentree Mortgage June 24, 2005 441-7648443 $101,200.00 $253.00
70 Greentree Mortgage September 27, 2005 541-7259818 $172,550.00 $431.00
71 Greentree Mortgage September 27, 2005 061-2851588 $105,763.00 $264.00
72 Greentree Mortgage September 27, 2005 381-7609933 $149,816.00 $375.00
73 Greentree Mortgage September 27, 2005 351-4712611 $125,234.00 $313.00
74 Greentree Mortgage September 27, 2005 351-4713249 $180,000.00 $450.00
75 Greentree Mortgage September 27, 2005 352-5391775 $184,000.00 $460.00
76 Greentree Mortgage September 27, 2005 351-4704956 $92,060.00 $230.00
12
Broker Payment Date FHA Number Mortgage Quality
Amount Incentive
Earned
77 Greentree Mortgage September 27, 2005 441-7665096 $79,779.00 $199.00
78 Greentree Mortgage September 27, 2005 351-4711543 $236,241.00 $591.00
79 Greentree Mortgage September 27, 2005 483-3551590 $75,922.00 $190.00
80 Greentree Mortgage September 27, 2005 481-2511403 $88,000.00 $220.00
81 Greentree Mortgage September 27, 2005 441-7670362 $93,532.00 $234.00
82 Greentree Mortgage September 27, 2005 483-3559116 $83,686.00 $209.00
83 Greentree Mortgage September 27, 2005 351-4720749 $199,486.00 $499.00
84 Greentree Mortgage September 27, 2005 352-5398954 $305,515.00 $764.00
85 Greentree Mortgage September 27, 2005 351-4688427 $113,680.00 $284.00
86 Greentree Mortgage September 27, 2005 352-5401396 $206,008.00 $515.00
87 Greentree Mortgage September 27, 2005 351-4722047 $183,001.00 $458.00
88 Greentree Mortgage September 27, 2005 352-5403295 $233,805.00 $585.00
89 Greentree Mortgage September 27, 2005 351-4718042 $232,615.00 $582.00
90 Greentree Mortgage September 27, 2005 351-4721715 $227,321.00 $568.00
91 Greentree Mortgage September 27, 2005 351-4669151 $153,569.00 $384.00
92 Greentree Mortgage September 27, 2005 351-4703352 $129,412.00 $324.00
93 Greentree Mortgage September 27, 2005 105-2268449 $144,333.00 $361.00
94 Greentree Mortgage September 27, 2005 483-3537054 $83,510.00 $209.00
95 Greentree Mortgage September 27, 2005 351-4706298 $139,055.00 $348.00
96 Greentree Mortgage September 27, 2005 351-4707692 $165,445.00 $414.00
97 Greentree Mortgage September 27, 2005 137-3197714 $161,303.00 $403.00
98 Greentree Mortgage September 27, 2005 071-0998196 $147,428.00 $369.00
99 Greentree Mortgage September 27, 2005 281-3161121 $50,115.00 $125.00
100 Greentree Mortgage September 27, 2005 352-5383660 $284,707.00 $712.00
101 Greentree Mortgage September 27, 2005 093-5915781 $152,720.00 $382.00
102 Greentree Mortgage September 27, 2005 441-7651617 $133,726.00 $334.00
103 Greentree Mortgage September 27, 2005 351-4707295 $190,510.00 $476.00
104 Greentree Mortgage September 27, 2005 442-2538986 $62,930.00 $157.00
105 Greentree Mortgage September 27, 2005 483-3548874 $130,833.00 $327.00
106 Greentree Mortgage September 27, 2005 351-4710213 $190,500.00 $476.00
107 Greentree Mortgage September 27, 2005 352-5385582 $258,825.00 $647.00
108 Greentree Mortgage September 27, 2005 351-4710452 $243,600.00 $609.00
109 Greentree Mortgage September 27, 2005 241-7622493 $141,491.00 $354.00
110 Greentree Mortgage September 27, 2005 441-7661751 $139,500.00 $349.00
111 Greentree Mortgage September 27, 2005 352-5396556 $221,030.00 $553.00
112 Greentree Mortgage September 27, 2005 381-7620442 $125,012.00 $313.00
113 Greentree Mortgage September 27, 2005 105-2309096 $127,890.00 $320.00
114 Greentree Mortgage September 27, 2005 381-7643177 $113,883.00 $285.00
13
Broker Payment Date FHA Number Mortgage Quality
Amount Incentive
Earned
115 Greentree Mortgage September 27, 2005 351-4711292 $226,348.00 $566.00
116 Greentree Mortgage September 27, 2005 105-2274943 $107,376.00 $268.00
117 Greentree Mortgage September 27, 2005 381-7625658 $109,137.00 $273.00
118 Soma Financial March 7, 2005 331-1223505 $90,735.00 $227.00
119 Soma Financial March 7, 2005 331-1222834 $172,296.00 $431.00
120 Soma Financial December 1, 2004 331-1219496 $107,574.00 $269.00
121 NV Mortgage November 19, 2003 331-1196480 $153,975.00 $385.00
122 NV Mortgage December 10, 2003 331-1197802 $89,949.00 $225.00
123 NV Mortgage December 10, 2003 331-1197746 $108,698.00 $272.00
124 NV Mortgage February 13, 2004 331-1161597 $119,836.00 $300.00
125 NV Mortgage February 13, 2004 331-1200221 $159,803.00 $400.00
126 NV Mortgage February 13, 2004 331-1192285 $145,125.00 $363.00
127 NV Mortgage February 13, 2004 331-1202881 $108,349.00 $271.00
128 NV Mortgage February 13, 2004 331-1191591 $137,283.00 $343.00
129 NV Mortgage March 8, 2004 331-1204652 $189,235.00 $473.00
130 NV Mortgage March 8, 2004 331-1195558 $133,726.00 $334.00
131 NV Mortgage March 8, 2004 331-1192046 $150,919.00 $377.00
132 NV Mortgage March 8, 2004 331-1203598 $103,278.00 $258.00
133 NV Mortgage March 8, 2004 331-1204666 $158,891.00 $397.00
134 NV Mortgage March 8, 2004 331-1204462 $113,921.00 $285.00
135 NV Mortgage March 8, 2004 331-1187703 $102,350.00 $256.00
136 NV Mortgage March 8, 2004 331-1203307 $157,632.00 $394.00
137 NV Mortgage May 7, 2004 331-1187125 $124,468.00 $311.00
138 NV Mortgage May 7, 2004 331-1206411 $118,681.00 $297.00
139 NV Mortgage May 26, 2004 331-1204955 $158,047.00 $395.00
140 NV Mortgage May 26, 2004 331-1209056 $91,923.00 $230.00
141 NV Mortgage June 22, 2004 331-1208992 $102,902.00 $257.00
142 NV Mortgage June 22, 2004 331-1211860 $125,820.00 $315.00
143 NV Mortgage August 6, 2004 331-1212679 $153,846.00 $385.00
144 Southwest Funding December 19, 2005 491-8672794 $150,117.00 $375.00
145 Southwest Funding May 5, 2005 491-8567820 $58,974.00 $147.00
146 Southwest Funding May 5, 2005 491-8626748 $83,685.00 $209.00
147 Southwest Funding May 5, 2005 491-8604397 $150,220.00 $376.00
148 Coastal Lending Corp June 25, 2003 495-6477582 $155,726.00 $195.00
149 Coastal Lending Corp June 25, 2003 495-6482494 $168,236.00 $210.00
150 Coastal Lending Corp June 25, 2003 495-6504646 $160,801.00 $201.00
151 Coastal Lending Corp June 25, 2003 495-6503434 $76,886.00 $96.00
152 Coastal Lending Corp June 25, 2003 495-6507101 $110,685.00 $138.00
153 Coastal Lending Corp June 25, 2003 495-6530980 $156,716.00 $196.00
154 Coastal Lending Corp June 25, 2003 495-6605544 $78,865.00 $99.00
155 Coastal Lending Corp June 25, 2003 495-6685384 $125,012.00 $156.00
156 Coastal Lending Corp June 25, 2003 495-6689681 $99,216.00 $124.00
14
Broker Payment Date FHA Number Mortgage Quality
Amount Incentive
Earned
157 Tri Coast Funding Funded April 1-30, 2004 495-6798497 $74,196.00 $208.00
158 Tri Coast Funding Funded April 1-30, 2004 495-6911945 $78,764.00 $208.00
159 Tri Coast Funding Funded April 1-30, 2004 495-6933895 $133,941.00 $208.00
160 Tri Coast Funding Funded May 1-31, 2004 495-6942562 $120,128.00 $208.00
161 Tri Coast Funding Funded May 1-31, 2004 495-6990805 $110,027.00 $208.00
162 Tri Coast Funding July 29, 2004 495-7004880 $126,004.00 $158.00
163 Tri Coast Funding July 29, 2004 495-6974476 $137,837.00 $172.00
164 Tri Coast Funding July 29, 2004 495-6989982 $136,852.00 $171.00
165 Tri Coast Funding July 29, 2004 495-6943154 $165,791.00 $207.00
166 Tri Coast Funding Funded July 1-31, 2004 495-6986898 $166,388.00 $208.00
167 Tri Coast Funding Funded October 1-31, 2004 491-8510639 $102,454.00 $128.00
Professional Mortgage
168 Alliance December 1, 2004 052-3584464 $184,110.00 $460.00
Professional Mortgage
169 Alliance December 1, 2004 052-3568099 $196,910.00 $492.00
TOTAL $24,512,362.00 $58,571.00
15
First Magnus Financial Corporation Violated the Real Estate Settlement Procedures Act When Paying Incentives to Brokers for Generating Federal Housing Administration Mortgages
Published by the Department of Housing and Urban Development, Office of Inspector General on 2008-07-14.
Below is a raw (and likely hideous) rendition of the original report. (PDF)