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FDIC Goes After Mortgage Broker for Fraud

On June 3, the ""FDIC"":http://www.fdic.gov filed a complaint in federal court against the owner of mortgage broker ""Amerifund Financial, Inc."":http://www.amerifundfinancial.com/, seeking $1 million in damages based on civil fraud allegations.

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Filed in the U.S. District Court for the Central District of California, the suit alleges that the defendant, Eric Matthew Anderson, and several others, also named by the suit, submitted $2.4 million in fraudulent loans to the Downey Savings and Loan Association between 2000 and 2007, Mortgage Daily reports.

The FDIC said that Amerifund ""caused borrowers' financial statements to be altered or misstated"" in mortgage loan applications, and that borrowers would not have qualified for their loans absent inaccurate criteria made available by the mortgage broker.

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The suit further claims that the defendants ""either knowingly or recklessly altered and/or inflated the borrowers' stated incomes and assets; and/or understated the borrowers' debts; and/or misrepresented the borrowers' occupancy of the collateral property as their primary residence.""

The FDIC claims that the loans, worth $2,399,500, cost the Downey Savings and Loan Association nearly $1.2 million. Posting over $500 million in losses and debts, the association filed for Chapter 7 liquidation in bankruptcy court in 2008, according to Bloomberg News.

In addition to civil fraud, the suit also accused Anderson and other defendants of professional negligence and breach of contract.

As broker of record and the owner, Anderson reportedly abused his control of Amerifund's assets and operations by failing to distinguish corporate assets from his own. The FDIC claims that the defendant paid himself a larger-than-appropriate salary and failed to take corporate minutes and document shareholder meeting information.

The suit comes on the heels of other indictments planned by the FDIC as part of a crackdown on alleged fraud and professional negligence in the real estate and banking industries.

In 2010, The Los Angeles Times reported that the FDIC planned to authorize suits as part of a ""first wave"" against banking and other officials found culpable in the housing and financial crises.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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