Trouble continues to brew for Live Well Financial, the forward and reverse mortgage lender that unexpectedly went bust last month, as court documents reveal that federal authorities are looking into the lender’s dealings.
According to documents filed recently by some of Live Well’s creditors, Flagstar Bank and Mirae Asset Securities, the Federal Bureau of Investigation and the Securities and Exchange Commission are looking into Live Well.
Last week, the two creditors teamed with a third – Industrial and Commercial Bank of China Financial Services – to file petitions with the U.S. Bankruptcy Court in Delaware to force Live Well into involuntary Chapter 7 bankruptcy.
In those filings, Live Well’s management was called into question, with both Mirae and Flagstar stating that they had been contacted by authorities about the lender.
According to Mirae, it received a phone call from the SEC on the very day Live Well announced its closing. In sworn testimony, Mirae said that it learned during that call that authorities are investigating the lender and its representatives, including its CEO, Michael Hild.
Then, Mirae said that less than three weeks later, the Assistant U.S. Attorney from the Southern District of New York contacted Mirae about a potential investigation into Live Well.
Flagstar made similar claims in its own filing, stating that it was subpoenaed by the SEC on May 9 for records regarding its dealings with Live Well.
Flagstar also said that in early June, it was contacted by the Bank Fraud Division of the FBI regarding a potential investigation into Live Well.
Flagstar noted that, during one of its repeated attempts to glean information from Hild about the status of Live Well’s debt and plans for repayment, Hild said the company had lawyered up, hiring corporate counsel, and that Hild himself had hired a personal attorney.
Flagstar also said it was informed that either Hild or Live Well had hired a criminal attorney at that time.
HousingWire contacted the FBI, the SEC and the U.S. Attorney's Office in the Southern District of New York for confirmation that an investigation was underway.
While both the U.S. Attorney's Office and the SEC declined to comment on the matter, citing an inability to confirm or comment on pending investigations, the FBI’s Richmond office did confirm that an investigation into Live Well was underway at its New York office.
As of publication time, the FBI’s New York office has not responded to a request for comment. This article will be updated should the FBI respond.