The federal government has filed a civil mortgage fraud lawsuit against Golden First Mortgage Corp. and its president, David Movtady, claiming that the Great Neck, N.Y.-based company and its leader ‘intentionally, knowingly, and recklessly approved loans since 2002 that should never have been federally insured.’
The lawsuit alleges that since 2002, Golden First and Movtady ‘failed to maintain a quality control program independent of the company's business units’ as the required by the U.S. Department of Housing and Urban Development (HUD). The lawsuit claims that the company engaged in a corporate environment where ‘closing and selling loans trumped quality control,’ while employees were paid to ‘expedite loan approvals and spent minimal time on underwriting.’ As a result of such actions, the lender is being charged with at least $12 million in losses on Federal Housing Administration-insured loans.
‘As alleged, Golden First and David Movtady churned out bad loans and lied about their compliance with HUD requirements, leaving taxpayers on the hook for millions of dollars when the loans inevitably defaulted,’ says Manhattan U.S. Attorney Preet Bharara. ‘This office continues its work to hold the perpetrators of mortgage fraud accountable, as this latest complaint demonstrates.’