Downey Receiver Accuses Amerifund Of $1.2M Fraud

Law360, New York (June 7, 2011, 7:17 PM EDT) -- The government receiver for bankrupt Downey Savings and Loan Association FA hit California mortgage broker Amerifund Financial Inc. with a $1.2 million negligence suit Friday, claiming it breached contracts and submitted fraudulent documents, helping to bring down the plaintiff.

The Federal Deposit Insurance Corporation's lawsuit, lodged in the Central District of California, claims the Spring Valley, Calif., mortgage company and its principal shareholder, mortgage broker Eric Matthew Anderson, submitted mortgage papers to Downey Financial that "recklessly altered and/or inflated the borrowers' stated incomes."

"Amerifund was conceived,...
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