Friday, October 14, 2011

Former Lend America President Pleads Guilty to Mortgage Fraud

After admitting to an extensive mortgage fraud scheme, the former president of Lend America was suspended from doing any future business with HUD. Michael Primeau pled guilty to an extensive mortgage fraud scheme in which he ordered employees to pay company operating expenses with funds intended to pay borrowers’ first mortgages at refinance closings. Previously an FHA -approved lender, New York-based Lend America also allegedly violated FHA’s origination and underwriting standards on several occasions, according to HUD. Violations include submitting false certifications, approving loans that did not meet minimum credit requirements, failing to properly and accurately document borrowers’ incomes, and omitting liabilities from underwriting analyses. Ideal Mortgage Brokers, operating as Lend America and Lending Key, was in operation for 20 years before HUD determined it was violating FHA rules. In 2009, HUD barred the company from originating and underwriting FHA-insured mortgage loans. At the same time, Ginnie Mae shut down the operation and seized the company’s portfolio. Announcing Primeau’s suspension from conducting further business with HUD, the department’s general counsel, Helen Kanovsky said, “We take this action to protect the public.” “Beyond this particular suspension, the broader message to the lending community should be crystal clear – the federal government will not do business with those who fleece homeowners,” Kanovsky added.

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