Provident Bank accuses NY company of fraud
By SAM GARCIA
10/11/2002

A New York mortgage banking firm has been accused by The Provident Bank of mortgage fraud.

The Provident Bank, based in Jersey City, New Jersey, has reportedly filed a civil lawsuit against Community Home Mortgage Corp., accusing the company of fraud. According to an article published by Newsday.com earlier this week, Provident alleges that the Melville, New York company owes it more than $24 million.

On its website, Mortgages.cc, Community says it "originates over $150 million in first and second mortgages annually." The company, which Ginnie Mae currently reports as an approved single family issuer, says it is "licensed in over 30 states for direct Mortgage lending."

Ira Silverman is listed as the president of Community, according to a list of licensed second mortgage lenders published by the Indiana Department of Financial Institutions.

Apparently, Community is alleged to have been warehousing the same loans with two different warehouse lenders. Provident claims that Community garnered at least $910,000 worth of advances each from Provident and Warehouse One, the second warehouse lender, Newsday.com said.

Last month, about 15 agents from the FBI and the U.S. Department of Housing and Urban Development (HUD) raided the 110-employee company, Newsday.com reported, and Community now faces civil charges and a criminal investigation. Newsday.com went on to say that the company, which has since closed its doors, is also under investigation for processing potentially illegal 203(k) HUD loans where proceeds were used for self-enrichment instead of the intended use -- helping not-for-profits build and renovate houses.

In its weekly bulletin dated October 4th, New York's state banking department reported that Community surrendered its licenses for several locations on October 2nd.

Representatives from HUD and the U.S. Attorney's office refused to comment on the case.

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