HUD Issues Notice of Violation Against Lend America
|October 21, 2009|
The U.S. Department of Housing and Urban Development's Mortgagee Review Board today notified Ideal Mortgage Bankers, doing business as Lend America and Lending Key (Ideal), that it has uncovered numerous violations of the Federal Housing Administration's (FHA) origination and underwriting requirements, including submitting false certifications and failing to document the borrower's income and creditworthiness.
HUD also notified four of the company's underwriters that it was suspending and/or proposing debarments for their actions in connection with these violations. Separately, the Department issued pre-penalty notices to these underwriters advising them that the Department is considering imposing civil money penalties against them as well.
Ideal has 30 days to respond to the Board's notice. The individual underwriters have 30 days to oppose their suspensions and/or proposed debarments and to respond to the allegations in the pre-penalty notice.
"Any FHA-approved lender that seeks to do business with us must follow our standards, it's just that simple," said FHA Commissioner David Stevens. "If we determine that our partners are not playing by the rules, they'll cease being our partners. It's not just about protecting the financial health of the FHA insurance fund – this is about protecting each and every family that looks to the FHA for safe and secure mortgage financing."
At HUD's request, the U.S. Attorney for the Eastern District of New York is seeking a temporary restraining order against Ideal to prevent it from originating any new FHA-insured mortgages while federal prosecutors pursue a Civil Fraud Injunction against the Company. The Mortgagee Review Board alleges that Ideal violated the following HUD/FHA requirements by: