Lend America Shuts Down After FHA Suspension

December 1, 2009 No Comments »

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Lend America, a nationwide mortgage provider, has shut down operations, according to an advisory posted on its website.

The former lender wrote, “Effective immediately the company has ceased it loan origination and operations. The company will continue to operate to fulfill its obligations to past and current borrowers, FNMA, GNMA and the regulatory agencies.”

Back in late October, the company was accused of multiple origination and underwriting violations by the HUD Mortgagee Review Board.

Offenses included submitting false certifications from borrowers, approving loans that didn’t meet credit requirements, failing to document income and asset information, omitting liabilities from underwriting analyses, and charging excessive mortgage broker fees.

At the time, the U.S. Attorney for the Eastern District of New York also sought a temporary restraining order against the company’s parent “Ideal Mortgage Bankers,” intended to prevent them from originating any new FHA loans while federal prosecutors pursued a civil fraud injunction.

Sadly, Lend America had referred to itself as “the authority on FHA financing” prior to the complaints and subsequent suspension.

There’s a good chance you’ve seen the company’s commercials on national television, which were designed to look like breaking news stories masked in a CNN-style template.

The Melville, NY-based company provided residential mortgages direct to consumers for the past 20 years and apparently had a 600-strong workforce, whose fate is unknown.

Lend America had been planning a foray into wholesale lending before the investigation got underway back in October.

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