Local Digest: FHA suspends Equitable Trust

MORTGAGE FINANCING

FHA suspends Equitable Trust

The Federal Housing Administration suspended Equitable Trust Mortgage of Baltimore for at least six months effective immediately for overcharging borrowers, the agency announced on Monday.

The lender charged 37 borrowers fees that exceeded the agency's limits in a recent six-month period, and 68 percent of the borrowers were minorities, according to the agency. In 21 of those cases, Equitable Trust failed to properly disclose fees to customers.

The company, which could not be reached for comment, has a month to appeal the decision. It is also under investigation by the inspector general's office at the U.S. Department of Housing and Urban Development, which includes the FHA.

In a letter to the lender, the agency said Equitable Trust's default rate of 7.76 percent far outpaced the 4.69 percent national average in fiscal 2008.

-- Dina ElBoghdady

ENERGY

Pepco to exit retail business

Pepco Holdings, the owner of Washington's electric utility, decided to exit the retail electric and natural-gas supply business which it conducts through its subsidiary Pepco Energy Services to free cash for transmission and distribution investments.