Advertisement
  1. Business

Lennar, mortgage company loaned to unqualified buyers and deceived feds, lawsuit alleges

Homebuilding giant Lennar Corp. and its mortgage subsidiary made loans to unqualified buyers and violated federal laws, a former employee alleges.
Lennar Corp. builds new homes in many communities in the Tampa Bay area, including Concord Station in Land O’ Lake.
Published Jan. 7

CLEARWATER — Homebuilding giant Lennar Corp. and its Clearwater-based mortgage subsidiary made loans to unqualified buyers and violated federal laws, a former employee alleges.

In a lawsuit filed in Pinellas County Circuit Court, Wanda Burling says she repeatedly complained to a vice president at Eagle Home Mortgage about the company's lending practices only to be warned to "let it go'' if she wanted to keep her job.

The same executive also said that given a choice between Burling and loan originators who "may or may not follow the rules,'' Eagle would always choose the originators as they are "producers'' for the company.

Burling, who was fired last year, is seeking back pay with interest and compensatory damages from Lennar and Eagle, formerly known as Universal American Mortgage Co.

Miami-based Lennar, one of the nation's largest home builders, is active in numerous new-home communities in the Tampa Bay area. Records show that Eagle has made thousands of mortgage loans in Hillsborough and Pasco counties.

In December, the Justice Department reached a $13.2 million settlement with Eagle to resolve allegations that it violated the False Claims Act by falsely certifying that it complied with FHA lending standards. It is not known whether Burling's allegations factored into that case; she could not be reached for comment and her lawyers did not return calls.

In the suit filed under Florida's whistleblower act, Burling, 64, said her job as a senior quality control manager was to review Eagle's lending activities to ensure they complied with state and federal regulations. She said she became aware of problems in 2016, soon after she was hired, when an elderly man with a reverse mortgage complained that the loan originator had lied to him.

In checking, the suit says, Burling discovered that the man's application was not properly completed and that he was never sent the disclosures of fees, costs or other information required under the federal Truth in Lending Act.

The suit also alleges:

• In at least four cases, the loan originator, the appraiser and the processor were related to one another. The originator would add "reserves'' to make it appear the borrowers had more funds then they did. The originator would also omit debts or add income from a part-time job the borrower no longer had. "All of these practices fraudulently increased the likelihood of the borrower being approved for the loan,'' the suit says.

• In other cases, borrowers did not have enough money to qualify for loans yet received them anyway. Eagle and Lennar hid that from the federal government in violation of the False Claims Act, the suit says.

• Any loans that Eagle pulled for audit were placed in a system called ACES. In order to hide negative findings, though, Eagle put the findings in the "notes'' section of the system as opposed to "reporting'' section. "This practice hid the findings from any government agency performing an audit,'' the suit says.

Burling said an Eagle vice president, Rebecca "Becky" Moore, warned her not to contact federal authorities about compliance issues. Moore also told her that Eagle was known as the "Good Ol' Boy group,'' that senior managers did not like strong women and that she "should be careful as they were after her.''

Last March, Moore fired Burling for "poor performance'' even though she had never received any disciplinary write-ups and had been given a raise and 20 percent bonus after her 2017 review. Pressed to elaborate on what constituted poor performance, Moore could not give an answer although a human resources representative subsequently told Burling: "We do not like your management style and we'll leave it like that.''

Moore, who is not a defendant in the suit, could not be reached for comment. Lennar does not comment on pending litigation.

Conact Susan Taylor Martin at smartin@tampabay.com or (727) 893-8642. Follow @susanskate.

ALSO IN THIS SECTION

  1. The Hofbrauhaus, St. Petersburg, located in the former historic Tramor Cafeteria, is in the center of legal a rent disagreement. [SCOTT KEELER  |  TIMES]
    The beer hall operators’ lawyers argue they weren’t properly notified when legal action began.
  2. Should we stop changing our clocks twice a year? CHARLES KRUPA  |  AP
    The Republican senator, along with Sen. Rick Scott, introduced the Sunshine Protection Act earlier this year.
  3. The Aldi store located on 1551 34th St N. in St. Petersburg features the store look being deployed across the country. JONES, OCTAVIO   |  Tampa Bay Times
    The store had been closed for about two months during its makeover.
  4. The view looking northeast from the balcony of the penthouse at One St. Petersburg that was flipped for a $1 million profit in October. MARTHA ASENCIO-RHINE  |  Times
    October home sales included one of the priciest condos ever in the Tampa Bay area.
  5. Tampa resident, Ann Turner Cook and Mike Dermo, vice president of field sales for Gerber Products Co., celebrate Gerber's 80th anniversary at the Grand Hyatt Tampa Bay in 2008. Times (2008)
    Widely known for appearing on baby-food jars, Cook taught for 26 years before retiring to become a mystery writer.
  6. Zum driver Stacey Patrick, right, waves goodbye to student Saahas Kohli, left, and his mother, Alpa Kohli, obscured behind her son, as he returns home from school in Saratoga, Calif. A handful of ride-hailing companies have surfaced that allow parents to order rides, and in some cases childcare, for children using smartphone apps. The promise is alluring at a time when children are expected to accomplish a dizzying array of extracurricular activities and the boundaries between work and home have blurred. But the companies face hurdles convincing parents that a stranger hired by a ride-hailing company is trustworthy enough to ferry their most precious passengers. (AP Photo/Ben Margot) BEN MARGOT  |  AP
    Ride-hailing companies resolve a dilemma many parents face: how to pick up your kids from school while holding a full-time job.
  7. Integrity Express Logistics, which is expanding its Tampa office, matches freight with trucks to haul it in 48 states and Canada. (DANNY JOHNSTON | Associated Press) DANNY JOHNSTON  |  AP
    The company plans to hire at least 50 more employees and to spend $230,000 on renovations and new office equipment.
  8. Bins filled with products move on conveyor belts at the Amazon Fulfillment Center in Ruskin. Amazon just announced it will open a similar center in Auburndale, Fla. (Times | 2018) Tampa Bay Times
    The new center will span more than 1 million square feet and be No. 11 in the state.
  9. DOUGLAS R. CLIFFORD   |   Times
A shot taken on June 4, 2019 during the 12-week demolition of the Harborview Center which began in April on the corner of Cleveland Street and Osceola Avenue in downtown Clearwater. The project is a key part of the city's roughly $64-million Imagine Clearwater waterfront redevelopment project. Will residents move downtown once it is done? DOUGLAS R. CLIFFORD  |  Tampa Bay Times
    “It’s our biggest challenge,” one city official said.
  10. Although people with insurance pay nothing when they get their flu shot, many don’t realize that their insurers foot the bill — and that those companies will recoup their costs eventually.
    Federal law requires health insurers to cover the vaccines at no charge to patients, but the companies eventually recoup the cost through higher premiums.
Advertisement
Advertisement
Advertisement