Lend America, which was banned from Federal Housing Administration lending on Monday, was refinancing certain customers without paying off their prior existing lien, according to veteran mortgage banking attorney Robert Lotstein

Lotstein, who has clients that did business with Long Island-based Lend America, said this has created a situation where customers received a new loan from the lender but without their existing lien being paid off.

A managing attorney with Mortgage Banking Advisors,  Lotstein said this has created a situation where some Lend America mortgagors "will get a call from their old lender asking where the payment is."

The attorney said his mortgage banking and vendor clients informed him of the situation. He said he could not quantify how many Lend America refi customers might be having this problem. A spokesman for the company said the lender is trying to rectify the problem.

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