Allied Home Mortgage Seeks Court Approval For FHA Return

After being sued by the U.S. Department of Housing and Urban Development (HUD) and suspended from Federal Housing Administration (FHA) and Ginnie Mae programs last week, Houston-based Allied Home Mortage Corp. is seeking court approval to be allowed back into the FHA program.

Federal officials last week accused the lender and two of its executives of violating numerous HUD regulations and defrauding the agency for the better part of a decade. Officials claim, among other allegations, that Allied Home originated FHA-insured loans through a network of ‘shadow’ branch offices that had not received FHA approval.

According to a Bloomberg BusinessWeek report, Allied CEO James C. Hodge petitioned U.S. District Judge Melinda Harmon last week for re-entry into the FHA program. Although Harmon initially rejected the request, she later changed her mind and asked HUD and Hodge to provide more information at a court hearing today.

Without FHA business, Allied would be ruined, Hodge claims. Harmon is expected to issue her decision this week, the BusinessWeek report says.
"This is a half-baked attempt to put another mortgage broker out of business so HUD can say it is cleaning up the industry," Hodge's attorney, Bruce Alexander, was quoted as saying.


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