(Adds details, FHA and company comment)
By Al Yoon
NEW YORK Nov 30 The U.S. Federal Housing
Administration said it withdrew approval from Ideal Mortgage
Bankers and affiliate Lend America for making government-backed
mortgages on Monday.
The FHA imposed civil money penalties of $512,500 against
Ideal, and said the U.S. Attorney's Office for the Eastern
District of New York was pursuing a civil fraud injunction
against the company and a senior manager.
Ideal Mortgage does business as Lend America and Lending
Key, the FHA said in its statement. Abuses included submitting
false certifications and approving loans that failed to meet
credit standards, it said.
"We have no tolerance for lenders who abuse their
FHA-approval," FHA Commissioner David Stevens said in a
statement. "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."
A crackdown on quality of FHA-backed lending comes as the
housing agency's capital reserves have recently fallen below
legally required levels.
Monday's action is part of a larger enforcement effort by
the U.S. Department of Housing and Urban Development against
lenders that abuse their rights to make FHA-backed loans, which
have been more coveted since the housing crisis shut other
programs geared toward low- and moderate-income Americans.
In August, the FHA suspended Taylor Bean & Whitaker after
finding the lender misrepresented an audit that raised concerns
Taylor Bean was the nation's 12th largest mortgage lender
from January to June. Lend America is smaller, but was the 22nd
largest originator of FHA loans based on originations in the
two years through September 30.
Ideal and Lend America have 30 days to challenge the FHA
action and civil penalties, the FHA said.
Lend America "is surprised and disappointed by today's
action," it said in an e-mailed statement, adding that it is
reviewing its options.
Lend America employs about 600 people in its Melville, New
In October, the FHA accused Lend America of falsely
certifying that borrowers who received more than $14 million in
loans met HUD's lending requirements.
The FHA's Mortgagee Review Board also made its decision
based on Ideal's failures to document borrower's income and
creditworthiness, and closing a loan with an excessive broker
fee paid to an approved FHA loan correspondent.
((email@example.com; +1 646-223-6347; Reuters