The Department of Housing and Urban Development (HUD) came down hard on Lend America and its president and pledged it will not do business with crooked lenders.
HUD is immediately suspending Michael Primeau, former president of the defunct Long Island, NY-based lender, from doing any business with HUD, after he admitted engaging in a wide-scale mortgage fraud scheme, according to HUD.
Primeau pled guilty to charges he directed employees of Lend America, a former Federal Housing Administration-approved lender, to divert mortgage funds intended to pay off borrowers’ first mortgages at refinance closings to pay company operating expenses, a press release from HUD said.
“We take this action to protect the public,” said HUD General Counsel Helen Kanovsky. “Beyond this particular suspension, the broader message to the lending community should be crystal clear – the federal government will not do business with those who fleece homeowners.”
This isn’t the first time that this company has felt the wrath of HUD and FHA. Two years ago, HUD had found that Ideal Mortgage Bankers, then doing business as Lend America and Lending Key, repeatedly violated the FHA origination and underwriting requirements, including submitting false certifications and failing to document borrower income and creditworthiness.
Hopefully the industry will follow HUD’s lead and stop doing business with people and companies who continue to deceive and defraud homeowners and the agents who represent them.