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Dec 16, 2020 by |

California False Claims Act Whistleblower Attorney: Mortgage Insurance Fraud And False Claims Against The Government

ATTORNEY NEWSLETTER

$24.9 Million Settlement Of Mortgage Lending Requirement Violations 

Lender Allegedly Issued FHA-Insured Loans To Ineligible Borrowers

Whistleblower To Receive $4.98 Million Reward

Fraud committed by mortgage lenders in government-insured home loans constitutes violations of applicable federal home lending and housing laws and regulations and the False Claims Act.  31 U.S.C. § 3729 (False Claims Act or “FCA); 12 U.S.C. § 1715 et seq.; 24 C.F.R. Part 203 et seq. (Federal Housing Administration mortgage insurance statute and eligibility regulations).  Individuals with original, credible information of mortgage fraud under federal insurance programs can institute an FCA whistleblower (also known as qui tam) action and receive a reward if the government recovers funds paid out as a result of the alleged fraud. The California whistleblower attorneys at Evans Law Firm, Inc. represent whistleblowers/relators in FCA cases of fraud against the government of any variety.  If you have credible, original information for a false claims case or any other whistleblower case in California, call us today at (415)441-8669 or toll free at (888)50EVANS 503-8267 and we can help.

Mortgage Insurance Fraud Example

In one recently settled mortgage regulations FCA case,[1] a home lender has agreed to pay $24.9 million to resolve allegations that it violated the False Claims Act by knowingly breaching material program requirements when it originated and underwrote mortgages insured by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA). The resolved allegations that the lender knowingly approved materially ineligible loans that later defaulted and resulted in claims to FHA for mortgage insurance, failed to comply with material program rules that require lenders to maintain quality control programs to prevent and correct underwriting deficiencies, and failed to self-report materially deficient loans that it identified.  The allegations were first brought in a qui tam complaint brought by the former head of quality control at the lender.  The whistleblower will receive $4,980,000 as his share of the government’s recovery.

Importance Of Qui Tam Mortgage Lending Cases

“Ensuring the integrity of federal lending programs is important to keeping those programs financially sound,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division in announcing the settlement.  “Together with our partners at HUD, we have worked hard to hold accountable FHA lenders that knowingly and materially violate program requirements that help Americans achieve the dream of home ownership.”  U.S. Attorney Robert Brewer for the Southern District of California added, “As this settlement demonstrates, we are committed to holding mortgage lenders accountable when they choose to abuse the integrity of vital government programs that are designed to assist homeownership,” said.  “We also commend the whistleblower for coming forward, exposing these wrongs, and working with the government investigative team.”

Contact Us

If you have any credible, original information of mortgage fraud against federally-insured housing programs, or any other kind of false claims against the federal government call Ingrid M. Evans and the other whistleblower attorneys at Evans Law Firm, Inc. at at Evans Law Firm at (415) 441-8669, or toll free at (888)50EVANS 503-8267 or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>.  Our litigators also handle whistleblower cases involving bank fraud under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program.  

[1] Evans Law Firm, Inc. was not involved in the case in any way. The case is captioned United States ex rel. Dougherty v. Guild Mortgage Company, Civ. A. No. 16-2909 (S.D. Cal.).

 

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