HUD suspends Lend America president for mortgage fraud
The Department of Housing and Urban Development suspended Michael Primeau, president of former Federal Housing Administration-approved lender Lend America. Primeau pleaded guilty to charges of diverting mortgage funds that were supposed to pay off first mortgages at a refinance closing. Instead, he used that money to pay for company operating expenses. Two years ago, HUD found Ideal Mortgage Bankers, which was doing business as Lend America and Lending Key, violated FHA origination and underwriting requirements. According to HUD, the company submitted false certifications and did not document borrower income and creditworthiness. HUD immediately barred Primeau from conducting any business with the agency and removed FHA approval from Ideal Mortgage Bankers. Ginnie Mae will no longer allow Lend America to issue its guaranteed mortgage bonds and seized the lender's portfolio. "We take this action to protect the public," said HUD 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." Write to Jon Prior. Follow him on Twitter @JonAPrior.