LendAmerica's Ashley banned from FHA mortgage mart

NEW YORK, March 8 (Reuters) - A senior official of LendAmerica, a nationwide lender of U.S.-backed mortgages recently shut off from government programs, was permanently banned from the industry, according to a court filing.

Michael Ashley helped build LendAmerica into one of the most prolific producers of loans backed by the Federal Housing Administration, using TV infomercials to reach borrowers. The company's growth came as the financial crisis had frozen most forms of credit for troubled borrowers, leaving them with the FHA as their last hope to refinance costly loans.

LendAmerica's shift to government-backed mortgages from subprime lending turned out badly, however, with the FHA in October accusing the company of abuses, including submitting false documents and loans that did not meet requirements.

The FHA's move against LendAmerica is part of a broader FHA review of hundreds of lenders as the government seeks to stem losses on its program, which accounts for about a quarter of all new loans.

In the March 3 judgment, Ashley was permanently banned from originating, marketing or submitting claims for FHA mortgages. He did not admit or deny liability regarding the allegations.

The judgment also prevents Ashley from being employed in any capacity, including as a strategist or consultant, for any company connected to the FHA.

U.S. Attorney for the Eastern District of New York Benton Campbell in October alleged Ashley, as LendAmerica's chief business strategist, had violated regulations and another industry ban throughout his career. Ashley plead guilty in 1993 to conspiracy to commit wire fraud in connection with instances of mortgage fraud, according to the complaint.

Kevin Keating, Ashley's attorney, did not return a call or an e-mail seeking comment. (Editing by Dan Grebler)