Worst Mortgage Lenders Have High Default Rates

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Summary: In the late 1990s, the National Training and Information Center released lists of the worst mortgage lenders in the country, as indicated by their loan default rates. The worst mortgage lenders had the highest rates of foreclosure. A list of Chicago mortgage lenders is included.

According to the National Training and Information Center, a Chicago-based non-profit resource center for grassroots neighborhood groups across the country, 10 lenders were originators of high-default FHA loans in three or more cities in a new study released this week. In addition to the "top 10," 21 lenders appeared in two individual city's "10 worst" and 118 appeared in a single city.

To qualify as a "high-default" lender, the mortgage banker must have a foreclosure rate that is at least 1.5 times the FHA average foreclosure rate for the metropolitan area, said Gale Cincotta, NTIC director.

According to the NTIC, the 10 worst lenders include: Norwest Mortgage, Inc., Fleet Mortgage Corp., Chemical Residential Mortgage, Bank United of Texas FSB, Sibley Mortgage Corp., Empbanque Capital Corp., Manufacturers and Traders Trust, MNC Mortgage Corp., Norwest-Independence One Mortgage, and Temple-Inland Mortgage Corp.

The 20 cities covered by the NTIC study include: Albany, NY, Atlanta, Baltimore, Buffalo, Chicago, Cleveland, Denver, Detroit, Los Angeles, Minneapolis, Newark, Philadelphia, Rochester, San Antonio, St. Louis, St. Paul, MN, St. Petersburg, FL, Syracuse, Tampa, and Wichita.

(EDITORS: Ten worst lenders are available for each of the above cities.)

(NTIC Source: U.S. Department of Housing and Urban Development, Section 335 Data. Loans that were in force less than one year at the time that the data was collected have been excluded. The default rates for these loans should be zero or very small.)

The 10 worst FHA lenders in Chicago, including their FHA default rates are:

Bank United of Texas FSB, 13.65 percent Dependable Mortgage Inc., 15.92 percent Chemical Residential Mortgage, 8.68 percent Midwest Funding Corp., 11.29 percent American States Mortgage Inc., 15.77 percent United Savings Association SW FSB, 19.28 percent Fleet Mortgage Corp., 6.34 percent First Mortgage Corp., 7.24 percent Norwest-Independence One MTG 8.61 percent SBG Corp, 7.42 percent.

(NTIC Source: U.S. Department of Housing and Urban Development, Section 335 Data. Loans that were in force less than one year at the time that the data was collected have been excluded. The default rates for these loans should be zero or very small.)

Oct. 20, 1997.

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Related Topics

• foreclosure, 
• fraud, 
• HUD, 
• mortgage, 
• mortgage fraud, 
• mortgage lenders

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