Feds Probe Lend America Not Paying Off Firsts

Almost two months after National Mortgage News first reported that Lend America of Long Island was refinancing consumers but then not paying off their prior first liens, federal officials are investigating those allegations. Existence of the probe was first reported by Newsday. Lend America's top executive, Michael Ashley, could not be reached for comment. The Federal Housing Administration banned the Melville-based Lend America, a privately held nondepository, from its insurance program in November, citing numerous underwriting violations. FHA loans accounted for most of its production. In early December the company stopped originating new loans and laid off most of its workforce. NMN quoted consumers who had loans with the company as well as an attorney who represented vendors that did business with the nonbank.