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Timeline: Allied’s Trail of Sanctions

Since 2003, three federal agencies and more than a dozen states have either cited or settled with Allied Home Mortgage Capital Corp. or a related company for misconduct. In most cases, Allied settled without admitting fault or liability.

August 2003: Allied agreed to pay $50,000 to settle allegations by the U.S. Department of Housing and Urban Development Mortgagee Review Board that it had engaged in improper branch operations and allowed people not employed exclusively by Allied to originate loans.

July 2003: Agreed to pay $25,000 to settle allegations that it violated Pennsylvania’s Do Not Call law.

September 2003: Agreed to pay $370,000 to settle allegations by HUD that it charged consumers more for credit reports than it paid, a practice called “upcharging.”

December 2003: Agreed to pay $65,000 to Massachusetts to settle allegations that it had illegally sent pre-recorded phone messages to hundreds of Massachusetts consumers, including some on the Do Not Call registry.

June 2004: Agreed to pay $51,000 to Rhode Island for originating loans from an unlicensed location.

June 2004: Agreed to pay $100 to Ohio for an advertising violation.

July 2005: Agreed to pay $1,430 to Rhode Island for failing to keep documentation showing that borrowers were permitted to select a title attorney.

September 2005: HUD Office of Inspector General found that Allied Home Mortgage Corp., an affiliated firm, had overstated borrowers' income for two loans and understated liabilities for one of those borrowers. Also found that the firm had failed to reduce borrowers’ interest rates even though it had charged them fees to do so. Allied disputed the findings.

December 2005: South Carolina denied a broker’s license to the former manager of Allied’s Goose Creek office, citing her criminal record. She is later accused in lawsuits of pocketing money from borrowers’ closings.

February 2006: Washington banned a former broker in Allied’s Spokane office from working in the industry after he was convicted of 10 felonies for stealing Allied clients’ money and laundering it.

July 2006: Arizona denied a broker’s license to a firm owned by Allied’s Tucson branch manager because she had been previously convicted years of stealing $1,800 while working at a bank.

December 2006: Agreed to pay West Virginia $12,000 for education and restitution after allegations that it had misled borrowers about the terms of their loans.

September 2007: U.S. Department of Agriculture Office of the Inspector General found that Allied failed to properly service a rural rental housing loan, designed to increase affordable multifamily housing in rural America. “Our audit concluded that the loan’s default and resulting $2.4 million loss was the direct result of Allied’s failure to properly originate and service the loan … Allied cannot absolve itself of its responsibility by claiming that their branch manager acted independently.” The dispute is currently in federal court.

November 2007: Agreed to pay $1.9 million in back wages after an investigation by the U.S. Department of Labor’s Wage and Hour Division found that 588 branch managers, loan officers, loan processors and clerks had not been properly paid.

November 2007: Agreed to pay Rhode Island $30,000 for violations found during an inspection.

June 2008: Ordered to pay $500 to Illinois for marketing violations.

November 2008: Agreed to pay $5,000 to Virginia for marketing violations.

 

January 2009: Agreed to cease doing business from a Waterbury, Connecticut office after its surety bond was cancelled.

February 2009: HUD’s Office of the Inspector General found that Allied violated HUD rules by requiring branch managers to personally enter into contracts for office space leases, equipment and utilities. In addition, Allied asked a former employee to use personal funds to cover branch operating losses.

March 2009: Agreed to pay $1,000 to Virginia for moving offices without approval.

March 2009: Agreed to pay $1,500 to Nebraska for failing to report sanctions in other states.

April 2009: Iowa revoked the license of Allied’s former branch manager in Clive, Ia. after accusing him of fraud and making false statements at a prior job. The manager later was sentenced to prison after pleading guilty to two counts of sexual abuse before and during this tenure at Allied.

June 2009: Agreed to pay $8,000 to Pennsylvania for giving out eight loans that were originated out of state.

August 2009: Agreed to pay $2,000 to Indiana for failing to include a clause in its broker agreement, failing to provide information in disclosure statements and employing a loan officer who was not registered.

August 2009: Agreed to put in place additional supervision, and perform background checks on all new employees after Georgia found it had been “transacting business” with an unlicensed person. Also agreed to pay $1,000 to support the Nationwide Mortgage Licensing System (NMLS).

September 2009: Agreed to pay $10,000 to New York for failing to file an annual report.

September 2009: Agreed to refund broker fees paid in a transaction after Kentucky found that an Allied broker had misled a borrower. Also agreed to pay $2,500 to support the NMLS.

November 2009: Agreed to pay $10,000 to Arkansas for allowing one of its brokers to solicit and accept nine applications even though her license had expired.

January 2010: Agreed to pay $50,000 to the support the NMLS after Connecticut determined that it employed 53 unlicensed loan originators from February 2006 to December 2008.