FHA, Ginnie Mae Take Action Against Lend America

Posted by Orb Staff on December 01, 2009 No Comments
Categories : Residential Mortgage

The Federal Housing Administration (FHA) has withdrawn the FHA approval of Ideal Mortgage Bankers, doing business as Lend America and Lending Key (Ideal).

The action is effective immediately and prevents Ideal from originating and underwriting new FHA-insured mortgages or from participating in the FHA single-family insurance program. Additionally, Ginnie Mae defaulted Lend America, and effective immediately, Lend America will no longer be able to issue Ginnie Mae securities.

FHA also imposed civil money penalties against Ideal in the amount of $512,500. The U.S. Department of Housing and Urban Development's (HUD) Mortgagee Review Board (MRB) took the action based upon two notices of violation issued to the company last month.

The MRB cited Ideal for numerous violations of FHA origination and underwriting requirements, including failing to document borrowers' income and creditworthiness, and for submitting false certifications to the Department.

"The evidence in this case points to a disturbing pattern of senior officials and underwriters, either not knowing what they were doing, or not caring," comments FHA Commissioner David Stevens. "Therefore, Ideal has been immediately withdrawn from participating in the FHA-insured mortgage program."

At HUD's request, the U.S. Attorney's Office for the Eastern District of New York is also pursuing a civil fraud injunction against Ideal and one of its senior managers. Ideal has 30 days to challenge the withdrawal action and the imposition of civil money penalties before an administrative law judge.

SOURCE: Federal Housing Administration

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