Primeau banned from FHA following guilty plea in mortgage fraud scheme
WASHINGTON, DC – October 13, 2011 – (RealEstateRama) — The U.S. Department of Housing and Urban Development (HUD) today announced it is immediately suspending Michael Primeau, former President of Lend America, from doing any business with HUD following his admission that he engaged in a wide-scale mortgage fraud scheme. Specifically, Primeau pled guilty to charges he directed employees of Lend America, a former FHA-approved lender, to divert mortgage funds intended to pay off borrowers’ first mortgages at refinance closings in order to pay company operating expenses.
“We take this action to protect the public,” said HUD’s 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.”
Two years ago, HUD found that Ideal Mortgage Bankers, doing business as Lend America and Lending Key (“Ideal”), repeatedly violated the Federal Housing Administration’s (FHA) origination and underwriting requirements, including submitting false certifications and failing to document borrower income and creditworthiness.
As a consequence, HUD withdrew the company’s FHA approval, preventing Ideal from originating and underwriting new FHA-insured mortgages or from participating in the FHA single family insurance program. In addition, the Government National Mortgage Association (Ginnie Mae) terminated Lend America as an issuer and seized its portfolio. Read HUD’s news release.
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