HUD suspends former Lend America president for ‘fleecing homeowners’

October 12, 2011 03:18PM

The U.S. Department of Housing and Urban Development is immediately
suspending Michael Primeau, former president of the defunct Melville, L.I.-based Lend
America, from doing any business with HUD, after he admitted engaging
in a wide-scale mortgage fraud scheme, according to HUD.

He pleaded 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 in order to pay
company operating expenses, a press release from HUD said. Primeau could not immediately be reached
for comment.

“We take this action to protect the public,” Helen Kanovsky,
general council of HUD, said in a statement. “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 had found that Ideal Mortgage Bankers, 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.

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.

Miranda Neubauer