The mortgage loan origination industry is facing yet another case of mischaracterization. Non-bank originator Change Lending, a Tucson, Arizona-based lender, has recently seen its CDFI (Community Development Financial Institution) certification pulled after an audit revealed mischaracterization of loans. The certification, still a relatively new concept in the mortgage industry, had allowed Change Lending to qualify for certain beneficial programs and tax credits.
The situation didn’t just affect Change Lending, however. The Change Company, which is the parent company of Change Lending, is seeing more serious repercussions. The Department of Justice has filed a suit against The Change Company, claiming it mischaracterized loans in order to receive federal bank insurance. This suit claims The Change Company did not always authenticate borrowers’ annual income or the value of the properties in question, discrepancies which have ultimately cost Fannie Mae tens of millions of dollars.
Major points:
– Change Lending had its CDFI certification pulled due to mischaracterization of mortgages
– The Change Company, the parent company of Change Lending, is facing suit due to mischaracterizing loans
– The suit claims The Change Company didn’t always authenticate borrowers’ annual income or property value
– These discrepancies have cost Fannie Mae tens of millions of dollars
You can read this full article at: https://www.housingwire.com/articles/change-lending-loses-cdfi-certification/(subscription required)
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