FeedbackAccording to Reuters, on Tuesday Lend America, a home mortgage company, ceased all loan originations and operations. The company changed their homepage to show customer service and inquiry numbers, as well as to convey that they are no longer in business.
This announcement came after the Federal Housing Administration withdrew its approval for Lend America to make FHA loans. Lend America reportedly committed many accounts of abuse, including creating false documentation and approving loans that do not meet FHA requirements. The FHA is now imposing civil penalties of $512,000 against Ideal Mortgage Bankers also known as Lend America.
The FHA began the investigation after Benton Campbell, U.S. Attorney for the Eastern District of New York, sought an injunction against Lend America. According to Campbell, the company falsely approved over $14 million worth of loans to borrowers who did not meet the guidelines for FHA loans.
FHA loans have increased dramatically in the past two years, as borrowers have flexible credit requirements and only need to have 3.5% of the loan amount for the down payment. Seller concessions are also up to 6% as opposed to the 3% in conventional loans. With the first-time home buyer tax credit, buyers are flooding into the market to buy a house before this credit expires April 30th, 2010.
For more information on Lend America’s violations, check out the full article by Reuters.
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Tags: FHA, FHA Penalties, First-Time Home Buyer Tax Credit, Lend America, Lend America Violations
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