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Lend America Shut Down By FHA

December 1, 2009 By

Lend America, the company that ran TV commercials that made it appear that President Obama was endorsing them was forced to close by FHA. The government entity, a part of HUD, has revoked Lend America’s ability to write loans with FHA backing and fined them over half a million dollars.

Some of the reasons cited are as follows:

  • Submitting false certifications that an employee of the lender obtained directly from the borrower the information contained in the application;

  • Approving loans that did not meet the minimum credit requirements;
  • Failing to adequately document the stability and/or source of income used to qualify mortgage loans;
  • Failing to adequately document the source of funds used to close the loan or satisfy various omitted liabilities;
  • Omitting liabilities from the underwriting analysis without supporting documentation;
  • Approving loans with ratios that exceeded HUD standards without significant compensating factors;
  • Exceeding HUD requirements when calculating the maximum insurable mortgage;
  • Failing to process a loan in accordance with HUD policy on employee loans;
  • Closing a loan with an excessive mortgage broker fee paid to an approved FHA Loan Correspondent;
  • Failing to provide the required documentation to support IMB’s decision to approve the mortgage loan;
  • Submitting false certifications to HUD in connection with the submission of its Yearly Verification Report.

    • While it’s important to recognize that they are innocent until proven guilty, the accusations, if true, mean that the company was attempting to circumvent the strict requirements that all other lenders have to follow to write FHA-backed loans.

    There should be zero tolerance for this type of behavior, especially since it is not a “I didn’t know” type of indiscretion.

    Scott

    Your Northwest Indiana Loan Guy, following the rules and licensed by the Indiana Secretary of States office.

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