We reviewed Southwest Stage Funding, LLC, dba Cascade Financial Services, in Gilbert, AZ. We selected Southwest Stage because it originated 1,841 loans totaling more than $244 million during calendar years 2012 and 2013. Further, it had received more loan endorsements on manufactured housing loans than any other lender in Texas since January 1, 2009. Our objective was to determine whether the lender complied with U.S. Department of Housing and Urban Development (HUD) and Federal Housing Administration (FHA) requirements when originating single-family FHA insured loans.
Southwest Stage originated and approved four loans that had underwriting deficiencies or had technical deficiencies with appraisals. These deficiencies occurred because Southwest Stage did not exercise due diligence when reviewing documents and appraisals. Southwest Stage took corrective action to resolve the deficiencies. Specifically, it corrected the deficiencies identified in the draft report, and stated that had it addressed the deficiencies with all underwriters and property compliance personnel. We reviewed the information supplied by the lender along with other information and revised our conclusions.
The lender corrected the deficiencies identified in the draft report; therefore, no further recommendations are warranted.