FHA, Ginnie Mae Take Action Against Lend America
|December 1, 2009|
The Federal Housing Administration (FHA) withdrew 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. In addition, the Government National Mortgage Association (Ginnie Mae) defaulted Lend America. Effective immediately, Lend America will no longer be able to issue Ginnie Mae securities.
FHA also imposed civil money penalties of $512,500 against Ideal. The U.S. Department of Housing and Urban Development's 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.
"We have no tolerance for lenders who abuse their FHA-approval," said FHA Commissioner David Stevens. "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. Therefore, Ideal has been immediately withdrawn from participating in the FHA-insured mortgage program."
"FHA's action triggers an immediate default in the Ginnie Mae program," said Ginnie Mae Executive Vice President Mary Kinney. "We have taken these steps to protect the integrity of our MBS program and the American taxpayer."
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. The action follows a Quality Assurance review that found Ideal violated the following HUD/FHA requirements by: