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| A New York lender has been accused of defrauding the government on $4 million in mortgages and has been banned for life from government originations.U.S. District Judge Nicholas G. Garaufis has approved a consent decree and judgment against Madison Home Equities Inc., according to a statement yesterday from the U.S. Attorney for the Eastern District of New York in Brooklyn.
Also named is Nadine Malone, president of the Long Island-based lender. The action resolves a civil lawsuit filed in October 2008 that accuses the defendants of running a scheme to defraud the U.S. Department of Housing and Urban Development. A temporary restraining order issued at the time prevented Madison from originating loans insured by the Federal Housing Administration. The latest action makes that order permanent. Madison, a direct endorsed FHA lender, allegedly certified that borrowers on $4 million in FHA-insured loans were qualified for the government-insured program — even though they were not. The decree and judgment permanently enjoins Madison and Malone from making FHA loans. They are also banned from utilizing any other government mortgage program. In addition, the defendants have agreed to pay penalties and indemnify HUD for any losses on loans it originated. “In these difficult times, the HUD Office of Inspector General, working with U.S. Attorneys across the nation, will use all appropriate means to isolate and hold accountable mortgage companies like Madison Home Equities, and their principals, whose fraudulent conduct jeopardizes the integrity of HUD’s FHA mortgage insurance program,” HUD Inspector General Kenneth Donohue said in an earlier announcement. |
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