Mortgagee Review Board considering sanctions against FHA lender;
Four employees also subject to sanctions and penalties
WASHINGTON - 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 prepenalty 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:
The proposed sanctions and penalties against the individual underwriters are based on their approval of mortgages for FHA insurance that contained the same deficiencies listed above. Moreover, HUD alleges that these underwriters falsely certified to the Department that the loans were originated in compliance with FHA requirements and were eligible for FHA mortgage insurance.
HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.