After more than 20 years of service in the residential mortgage marketplace, Ideal Mortgage Brokers (Ideal), doing business as Lend America and Lending Key, has ceased its loan origination and operations, according to the Lend America website.

On Monday, Ideal lost Federal Home Administration (FHA) approval and was defaulted by the Government National Mortgage Association (Ginnie Mae) after being faulted for poor underwriting and false certifications. In an initial statement made on Monday, Ideal said, “The Company is surprised and disappointed by today’s action by the U.S. Department of Housing and Urban Development’s Mortgagee Review Board. The Company is currently reviewing all possible options and remedies in response to this action, and will respond shortly once a decision has been reached.”

According to a report on Newsday.com, Ideal laid off most of its 600 employees within 24 hours of the actions taken by the FHA and Ginnie Mae.

An update from Nationalmortgageprofessional.com claimed that employees of Lend America were locked out of the company’s 60,000 square foot Meliville, New York headquarters and not allowed in until 11:00 a.m. EST, presumably as management met to plot the company’s next move.

In response to these layoffs, the company made a statement saying, “The unfortunate layoffs that occurred yesterday are a direct result of The Federal Housing Administration (FHA) withdrawing the company’s FHA-approval. We are extremely disappointed for all our employees who were impacted by this outcome, but at this time there was no other alternative.”

A quality assurance review confirmed Ideal’s violation of various HUD/FHA requirements, and the FHA Mortgage Review Board (MRB) cited Ideal for numerous violations of FHA origination and underwriting requirements, including failing to document borrowers’ income and creditworthiness and for submitting false certifications to HUD. As a result, Ideal can no longer originate or underwrite new FHA-insured mortgages, is ban from participating in the FHA single family insurance program, and is forbidden to issue Ginnie Mae securities. Additionally, the U.S. Attorney’s Office for the Eastern District of New York is pursuing a civil fraud injunction against Ideal and one of its senior managers

While Ideal’s mortgage origination and operations have come to a halt, the company said it will continue to operate to fulfill its obligations to past and current borrowers, FNMA, GNMA, and the regulatory agencies.