Bloomberg News

FDIC Sues Mortgage Broker Amerifund on Behalf of Downey Bank

June 07, 2011

(Updates with excerpt from complaint in third paragraph.)

June 7 (Bloomberg) -- The U.S. Federal Deposit Insurance Corp., receiver for Downey Savings & Loan Association, sued Amerifund Financial Inc. and affiliated individuals in federal court seeking more than $1 million in damages.

The FDIC alleges breach of contract, professional negligence and civil fraud in the complaint against Amerifund, a mortgage broker, filed June 3 in U.S. District Court in Santa Ana, California.

Amerifund, based in Spring Valley, California, and its agents, processing mortgages for Downey in 2004 and 2005, “caused borrowers’ financial statements to be altered or misstated” in loan applications, the FDIC said. Had true income and debts been disclosed, borrowers wouldn’t have qualified for Downey loans, according to the complaint.

Downey Financial Corp., the S&L’s parent, sought Chapter 7 liquidation in U.S. Bankruptcy Court in Wilmington, Delaware, in 2008, citing as much as $50 million in assets and $500 million in debts. U.S. Bancorp subsequently acquired Downey.

Amerifund’s phone number was not in service today and company owner Eric M. Anderson couldn’t immediately be located for comment.

The case is Federal Deposit Insurance Corp. v. Amerifund Financial Inc., 11CV840, U.S. District Court, Central District of California (Santa Ana).

--Editors: Andrew Dunn, Mary Romano

To contact the reporter on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net.

To contact the editor responsible for this report: Michael Hytha at mhytha@bloomberg.net.


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus