WHAS11 coverage

Louisville, Ky. (WHAS11) - If you got your home mortgage through Liberty Mortgage Funding Company, you won’t be getting another one.

The lender located on Shelbyville road has gone belly up and the FBI is looking at its records.

One of Louisville’s larger mortgage companies has filed for bankruptcy.  And two financial institutions think Liberty Mortgage Funding Company may have been involved in fraud, not just a mortgage market collapse.  And WHAS11 news has learned the FBI is keeping an eye on the case.

The doors are locked.  Only a few lights are on at Liberty Mortgage Funding Company’s offices in a Hurstbourne area office building. 

One of Louisville’s largest mortgage companies went out of business three weeks ago, putting up to 100 employees out of work, and prompting a filing for bankruptcy protection. 

The lawyer for the Prajna group, which owns Liberty Mortgage Funding, says the company was caught up in the mortgage market collapse.  But two financial institutions claim in court filings that Prajna, Liberty or its owners may have committed fraud.  And the trustee overseeing Liberty’s bankruptcy says the FBI has asked to see the company’s records, which have been ordered “locked down” by a judge. 

What WHAS11 News has been unable to find out from court records is whether any of Liberty’s mortgages are in jeopardy.  The better business bureau has had 10 complaints against the company in the past three years but none since it went out of business. 

The couple who ran liberty mortgage funding is Robert Lloyd and Bounmy Phouthavong.  They live in this east Louisville house valued at $915,000 dollars. 

They haven’t filed for personal bankruptcy protection but their company lists 77 creditors and owes at least $2.2 million dollars according to one lawsuit.

The attorney for Prajna group, better known as Liberty Mortgage Funding, says there’s been no fraud.  She was unaware of any FBI investigation.

The state levied a $20,000 dollar fine against Liberty Mortgage Funding earlier this year for having unlicensed agents selling mortgages.

Liberty mortgage funding is no relation to Liberty Mortgage of Kentucky, which also has offices in east Louisville.