Lend America
| Company type | Private |
|---|---|
| Industry | Mortgage lending |
| Defunct | 2009 |
| Headquarters | Melville, New York , United States |
Area served | United States |
Key people | Michael Ashley (Executive Vice President and Chief Business Strategist) |
| Products | FHA-insured loans, refinancing options with fixed-rate loans |
Lend America was a mortgage lending firm headquartered in Melville, New York, which operated in the United States until it shut down in 2009. The company marketed its offerings, such as refinancing options with fixed-rate loans insured by the Federal Housing Administration, using cable television infomercials and toll-free contact numbers.
During the period from 2008 to 2009, Lend America originated roughly 11,300 FHA-insured loans, placing it 22nd in volume among FHA lenders. Approximately 75% of these loans were refinances; however, the default rates on their loans were two to three times higher than the national average. The firm’s loan volume increased significantly amid the credit crisis and housing market downturn that restricted access to many private capital sources. Lend America concentrated on FHA loans because their qualification criteria were less stringent than those of Fannie Mae and Freddie Mac. Nevertheless, the U.S. Government accused the company of falsely certifying borrower eligibility under HUD lending standards despite being aware that many borrowers did not meet these requirements.
Following its removal from the FHA program, Lend America abruptly halted all lending activities on December 1, 2009.
Paid Advertisement Dispute in New York City
On March 26, 2008, Lend America broadcast a thirty-minute paid advertisement on WNBC, NBC’s station in New York City, replacing the usual airing of Access Hollywood. Joe Avellar, formerly a reporter at WNBC who later joined WCBS-AM, appeared within this advertisement.
The next day, a spokesperson for the station confirmed that this advertisement would not be repeated in the near future. Amidst the controversy, WNBC’s general manager Frank Comerford resigned on March 31 and was succeeded by Tom O’Brien.
U.S. Government Complaint Alleging Fraudulent Practices
On October 20, 2009, the United States Attorney General filed a civil lawsuit against Lend America seeking a court order to prohibit the company from issuing loans insured by the Federal Housing Administration (FHA). The complaint also named Executive Vice President and Chief Business Strategist Michael Ashley as a defendant. It alleged that Lend America knowingly certified borrowers as meeting HUD lending criteria for over $14 million in loans when they did not qualify. The legal filing identified about 40 instances of fabricated income statements and fraudulent FHA loan applications.
The Mortgagee Review Board of the United States Department of Housing and Urban Development found multiple FHA violations committed by Lend America, including false certifications and failure to properly document borrower income and credit evaluations. On March 3, 2010, a court issued a permanent injunction barring both Lend America and VP Ashley from participating in FHA lending and related industry activities. This ruling followed a five-month investigation prompted by HUD’s identification of 12 FHA violations involving Lend America’s parent company, Ideal Mortgage Bankers, concerning loan origination and underwriting procedures.
FHA Program Removal and Business Shutdown
On November 30, 2009, the Federal Housing Administration announced it would no longer insure loans originated by Lend America due to inadequate documentation of borrower income and creditworthiness. FHA Commissioner David Stevens described a "disturbing pattern" of carelessness among key executives and underwriting staff.
The very next day, December 1, 2009, Lend America ceased all lending operations without notice, with FHA-insured loans representing approximately 90 percent of its overall business.
Michael Ashley: Admission of Guilt and Associated Issues
In 1996, Michael Ashley, who served as Executive Vice President and Chief Business Strategist at Lend America, admitted guilt to wire fraud charges connected to his family's enterprise, Liberty Mortgage. Despite this conviction, Ashley maintained that it did not impair his ability to conduct lending activities.
A Civil Complaint filed by the Attorney General on October 20, 2009, disclosed that Ashley was employed by several mortgage companies even though he was prohibited from doing so by the State Banking Department. While his official role at Lend America involved marketing, his primary responsibility was training employees to originate FHA-insured loans. His earnings were linked to the volume of loans generated; for the fiscal year ending September 30, 2008, during which $1.075 billion in loans were issued, Ashley received $5.375 million in compensation.
Ashley was a key personality featured in Lend America's late-night television infomercials and utilized his background in car racing as a promotional tool for the business.
In July 2019, Ashley received a federal prison sentence of three years due to his involvement in the downfall of the mortgage lender, which had an annual volume of $1 billion. Additionally, he was mandated to pay $49 million in restitution and surrender $800,000 in forfeiture.