(Source: USAO, NY) Robert L. Capers, United States Attorney for the Eastern District of New York, David A. Montoya, Inspector General for the Department of Housing and Urban Development, and Frederick W. Gibson, Acting Inspector General for the Federal Deposit Insurance Corporation today announced the settlement of claims against Continental Mortgage Bankers d/b/a Financial Equities and its president, Walter Stashin, in United States v. Rainy Day Holdings, LLC. et al., Civil Action No. CV-15-5576.  The case is pending in federal court in Central Islip before United States District Judge Joseph F. Bianco.        

Continental and Stashin participated in a federal program sponsored by the United States Department of Housing and Urban Development (HUD) that allowed the lenders to make mortgage loans that are insured by the Federal Housing Administration (FHA) in the event of default.  The complaint alleged that for at least eight loans, Continental and Stashin funneled payments on borrowers’ loans through a purported charitable organization, the Rainy Day Foundation, in order to avoid defaults and delinquencies that could trigger governmental investigation.  The funneled payments artificially suppressed Continental’s comparative delinquency and default rates, as compiled and computed by the FHA.  In the settlement, Continental and Stashin admitted to making the payments and that the payments altered the company’s delinquency and default rates.  Continental and Stashin agreed to pay three hundred thousand dollars ($300,000) in settlement of the United States’ claims...