MORTGAGE LOAN COMPLIANCE®

In a joint statement from the U.S. Attorney for the Eastern District of New York, and the HUD Inspector General's office, the government says Lend America "falsely certified" that borrowers met FHA underwriting requirements. Using the civil courts, the government is seeking injunctive relief from both the company and its chief business strategist Michael Ashley.

Lend America issued a statement saying it was taken by surprise by the complaint and expects to continue doing business. It added that it plans to "respond more completely once all allegations are reviewed."

The U.S. Attorney and Department of Housing and Urban Development are seeking a court injunction to ban Lend America, Melville, N.Y., from originating FHA loans, accusing the nonbank lender with fraud in regard to $14 million in product.

Lend America services about $850 million in GNMA-backed products and currently ranks 18th nationwide in GNMA MBS issuance. Lend America recently stepped up plans for expansion into correspondent mortgage banking and wholesale that included FHA production.

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