Legal Blog

Compensation and Compliance Matters: Does Nova Audit Sound the Death Knell for Bond Loan Programs?

An audit released by the Department of Housing and Urban Development last week found that NOVA Financial & Investment violated Federal Housing Administration guidelines by originating FHA loans with borrowers that received state government down payment assistance. The Office of the Inspector General at HUD concluded that the down payment assistance was not a gift and thus represented an ineligible down payment source for an FHA loan. Its reasoning was that the down payment assistance loans were subjected to premium pricing, which in turn resulted in higher-priced mortgage backed securities whose proceeds later funded additional down payment assistance. Click here to read the entire article on National Mortgage News. akaren@offitkurman.com  | 240.507.1740 Ari Karen is an experienced litigator and speaker who has focused his practice in representing financial institutions in both government investigations and litigation before state and federal trial and appellate courts nationwide. Mr. Karen’s practice is diverse, representing clients on matters concerning banking regulations, Dodd Frank financial reform laws, contractual disputes, employment and labor statutes, wage-hour class actions, employment discrimination and fair lending matters, whistleblower complaints and non-competition claims, among others. You can also connect with Offit Kurman via FacebookTwitterGoogle+YouTube, and LinkedIn. WASHINGTON | BALTIMORE | FREDERICK | PHILADELPHIA | WILMINGTON | VIRGINIA | NEW YORK