FDIC Files Lawsuit Alleging Mortgage Broker Misconduct

On June 3, 2011, the FDIC, as receiver for Downey Savings and Loan Association, F.A. (“Downey”), filed a complaint in the U.S. District Court for the Central District of California against Amerifund Financial, Inc. (“Amerifund”), its principal shareholder, and its loan officers, alleging negligence, fraud, and breach of contract. The complaint alleges that Amerifund submitted mortgage loan applications and supporting documents, including appraisals, that were altered and/or inflated borrowers’ stated incomes and information; this allegedly led to the collapse of Downey. This suit follows two similar actions recently brought by the FDIC as receiver for Washington Mutual Bank. FDIC Complaint.