Lend America Accused of 20 Years of Mortgage Fraud

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 Therefore, Ideal has been immediately withdrawn from participating in the FHA-insured mortgage program.”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.

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