The Federal Housing Administration withdrew the approval of Ideal Mortgage Bankers, doing business as Lend America and Lending Key. The action becomes effective immediately and prevents Ideal from originating and underwriting new HFA mortgages.
While the majority of Ideal’s mortgage business was compromised of “forward” loans, the company was active in the reverse mortgage industry. According to HUD data, the company endorsed 250 HECMs in FY 2009.
“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 Therefore, Ideal has been immediately withdrawn from participating in the FHA-insured mortgage program.”
In addition, the Government National Mortgage Association (Ginnie Mae) defaulted Lend America. Effective immediately, Lend America will no longer be able to issue Ginnie Mae securities.
“FHA’s action triggers an immediate default in the Ginnie Mae program,” said Ginnie Mae Executive Vice President Mary Kinney. “We have taken these steps to protect the integrity of our MBS program and the American taxpayer.”
FHA also imposed civil money penalties against Ideal in the amount of $512,500.
Update: Lend America has ceased operations. According to its website:
Effective immediately the company has ceased it loan origination and operations. The company will continue to operate to fulfill its obligations to past and current borrowers, FNMA, GNMA and the regulatory agencies.