Ideal Mortgage Bankers no more
If you were thinking about getting an FHA-backed loan through Lend America, it’s time to come up with a different plan. Lend America, operated by Ideal Mortgage Bankers, has shut down. Ideal Mortgage Bankers also originated mortgages under the moniker Lending Key, but Ideal Mortgage Bankers is officially out of business.
The Federal Housing Administration withdrew its approval from Ideal Mortgage Bankers Monday, Nov. 30, and now Lend America and Lending Key are ceasing all loan originations. In October a civil lawsuit was filed against Ideal Mortgage Bankers.
Word from the FHA
HousingWire.com reports that the lawsuit “reveals allegations of a pattern of mortgage fraud that’s spanned more than 20 years across a number of mortgage firms.” The FHA appears to believe it’s possible that the crimes were unintentional, but that matters little.
“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 Therefore, Ideal has been immediately withdrawn from participating in the FHA-insured mortgage program.”
The lawsuit says that Mike Ashley, in sales staff meetings and in general, “encouraged Lend America sales staff to originate FHA loans, even when borrowers were not eligible.” He allegedly told people they could give FHA-backed loans regardless of credit score, which is not true.
A long time coming
Apparently, the loans in question span a time period of 20 years. So I guess it’s about time Lend America got taken to court. With all the mortgage fraud and debt help fraud out there, we certainly do not need companies like Lend America out there committing more fraud.
I hope that this whole subprime mortgage crisis has taught lenders a lesson, and I hope they won’t forget it. This recession we are going through is nothing the country hasn’t seen before, but it seems every decade or so we have to go through a bad economical period in order to remind people to be careful wiht their budgets and their credit.
Types of fraud
Whether Lend America did, in fact, commit fraud will be decided in court. However, this story does present a good opportunity to remind people seeking mortgage loan modification or debt relief how to avoid fraud. Make sure you don’t pay fees up front for consultations or debt consolidation loans or mortgage restructuring. You should only give debt relief or mortgage counselors money after the work has already been done.
Mortgage restructuring does not require that you sign the deed to your house over to someone else. Make sure you don’t hand over your most valuable asset to a scammer. Remember that research and knowledge are the best protection against getting swindled. Make sure you know throughly research any institutions that you entrust with your finances. You can never be too careful or know too much about a business. If anything about an organization seems even a little sketchy, there is plenty of legitimate help out there, so never be afraid to walk away and find company that you really trust.
Elizabeth,
I am presently in a very precarious position regarding the details of the Lend America situation. My wife & I signed a Re-finance consolidation closing package with LA on Nov. 18, 2009. The first payment was due on Dec. 1, and I mailed a cashiers check to their Melville NY offices to arrive before that date to satisfy our obligations of the new Mortgage. I would say not being able to contact and receive response form LA (laid off 600 staff) is most disconcerting. The fact that LA has not, in fact, paid off the current lenders tells me to keep paying the current lenders and "default" on the LA mortgage agreement that in my view was never actually "closed".
The ironic part of this story is that my application process was as thorough and professional as any I had gone through in my past several RE transactions in '88 & '99. Lend America's prior no-doc reputation was certainly NOT in effect, and every conceivable financial document was provided as requested – just like I would expect of any other prudent lender I've dealt with in the past. My screening, consisting of a BBB check and internet research, didn't reveal any screaming red flags. LA's number of BBB complaints was average, with most resolved. For a business of their huge volume, this is relatively healthy. The couple of internet complaints seemed like stray "I couldn't get a loan w/ no income nor assets, like their commercial said I could" rifs.
I appreciate your comments above and Locaste's suggestion above is probably right on.
Thanks – Ed
I am curious to establish linkage between financial fraud at Lend America and financing of it's proprietor's motorsports team.