Schumer to FHA: Help Qualified ‘Lend America’ Borrowers

Sen. Charles E. Schumer, D-New York, is asking the Federal Housing Administration to “aggressively” ensure that any legitimate and qualified Lend America borrower can secure a loan after this week’s shutdown of the Long Island-based mortgage servicer.

Lend America, based in Melville, N.Y., shut its doors this week after the FHA withdrew its approval, citing fraudulent lending practices. The company was the largest FHA lender in the New York metro area, having closed about $1.36 billion in loans on the year, according to a Newsday report. The company services about $1.8 billion in loans, Schumer said.

The FHA, citing abuses that included submitting false documents and making loans that did not meet requirements, imposed civil money penalties of $512,500 against Ideal Mortgage Bankers, which does business as Lend America.

Schumer said that there could be many New Yorkers who were in the mortgage approval process with Lend America, and were well qualified, even approved, for a loan, but now are unable to close since the lender was shut down.

Schumer said that the FHA should “aggressively work to ensure that any legitimate, qualified, and previously approved Lend America borrower is able to secure a new mortgage – at a similar rate and price – after the FHA, along with the Department of Justice, shut down the company due to reports of rampant fraud.”

Lend America has posted a statement on its website, with a list of contact emails:

“For clients that have previously applied with Lend America, we have initiated notification by United States Postal Service a Statement of Credit Denial, Termination or Change,” states Lend America.

The company also claims that “it will continue to fulfill its obligation to Fannie Mae (FNMA), Ginnie Mae (GNMA) and regulatory agencies.”