Archive

January 8, 2024

Invitation Homes, which owns and manages about 12,000 rental homes across California, has agreed to pay $2.04 million in civil penalties to resolve allegations of violating the state’s price gouging law and Tenant Protection Act (TPA). California’s price gouging law prohibits landlords from increasing rent by more than 10% in the aftermath of a state of emergency, while the TPA prohibits increasing rent by more than 5% plus the percentage change in the annual cost of living. Yet between 2019 and 2022, that is exactly what the company did. In addition to paying civil penalties, Invitation Homes is required to restore lawful rental rates to California tenants and ensure compliance with all state and local laws. CA AG

Tagged in: Housing and Mortgage Fraud,

November 17, 2023

A man who was convicted of carrying out a $7 million mortgage fraud scheme has been sentenced to 25 years. Through his company, purported mortgage investment company Grand View Financial LLC, Robert Sedlar promised consumers that he could clear the liens on their houses and retain the deeds if they transferred the titles to his company and made certain payments. Instead, the company filed false documents with the courts and county recorders officers that stalled foreclosures but failed to eliminate liens. CA AG

Tagged in: Housing and Mortgage Fraud,

December 14, 2022

In a False Claims Act case pursued on a non-intervened basis, Academy Mortgage Corporation agreed to pay $38.5 million to resolve allegations that it improperly originated and underwrote mortgages insured by the Federal Housing Administration. The whistleblower, Gwen Thrower, who was an underwriter at Academy, alleged that the Academy had an inadequate underwriting process that led to false certifications of compliance with underwriting requirements and, ultimately, to the government having to pay insurance claims on loans improperly underwritten by Academy. Thrower will receive a whistleblower award of $11.5 million. DOJ

Tagged in: FCA Federal, Financial and Investment Fraud, Housing and Mortgage Fraud, Whistleblower Case, Whistleblower Rewards,

October 17, 2022

In one of New Jersey’s largest civil monetary recoveries ever, Credit Suisse Securities (USA) LLC, Credit Suisse First Boston Mortgage Securities Corp., and DLJ Mortgage Capital, Inc. (collectively, “Credit Suisse”) has agreed to pay $495 million to settle a lawsuit involving misrepresentations it made to investors on the risks of residential mortgage-backed securities (RMBS) in the years leading up to the 2008 financial crisis. Approximately $100 million will resolve a civil monetary penalty, while another $300 million will be allocated toward restitution for victims nationwide. Although Credit Suisse previously settled with DOJ for $5.28 billion and with New York for $10 million, the New Jersey settlement is the first to provide restitution. NJ AG

Tagged in: Financial and Investment Fraud, Housing and Mortgage Fraud, Misrepresentations,

July 27, 2022

Trident Mortgage Company entered into a settlement agreement with federal and state agencies to resolve allegations that the non-bank lender intentionally discriminated against minority loan applicants by engaging in a pattern or practice of lending discrimination through “redlining.” Trident agreed to invest over $20 million to increase credit opportunities in neighborhoods of color in the Philadelphia metropolitan area, and pay a $4 million penalty to the CFPB. DOJ; CFPB; PA; NJ; DE

Tagged in: Financial Institution Fraud, Housing and Mortgage Fraud,

July 22, 2022

Vanderpoel family members Neal J. II, Eileen, Ryan, and Neal J. IV will pay $1.88 million in penalties, disgorge their ill-gotten gains, and are barred from performing any loan modification, debt adjustment, or mortgage compliance in New Jersey because of their predatory mortgage adjustment services targeting distressed homeowners. The family violated New Jersey’s Consumer Fraud Act and the Debt Adjustment Act, selling worthless loan modification and other adjustment services to borrowers, and charged excessive upfront fees. The entities used in furtherance of the fraud—Financial Services of America, Financial Processing Services, LLC, Tri-State Financial Relief, LLC, and Mortgage Help and Loan Audits of America, LLC—were also shut down. NJ OAG

Tagged in: Financial and Investment Fraud, Financial Institution Fraud, Housing and Mortgage Fraud, Misrepresentations,

March 31, 2022

Seth Levine, Norse Holdings’ founder, received a 97-month sentence for his decade-long, $60 million refinancing- and securities-related real estate fraud. Levine, through his 70-plus companies, directed the scheme, submitting falsified documents which inflated the value of the subject properties. The overvaluation of properties led to shortfalls, which Levine covered with cash-out refinances, leaving victim lenders with at least $47 million in losses. Levine defrauded securities investors of at least $13 million by inducing them to invest in multifamily properties. Levine overstated his personal investment in the properties via forged documents provided to investors, sold portions of his properties without investor consent, and brought on additional investors without investor consent—all contrary to representations made during the solicitation. USAO NJ

Tagged in: Financial and Investment Fraud, Housing and Mortgage Fraud, Securities Fraud,

November 22, 2021

Seven financial institutions – Barclays Capital Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, NatWest Markets Securities Inc., and Washington Mutual Mortgage Securities Corp. – have agreed to collectively pay $32.5 million to resolve claims by New Mexico that the banks did not adequately disclose the characteristics of certain mortgage-backed securities sold to New Mexico pension funds and a state-run investment council between 2003 and 2010. The settlement resolves a qui tam action under the New Mexico Fraud Against Taxpayers Act brought by Integra REC, LLC. NM

Tagged in: FCA State, Financial Institution Fraud, Housing and Mortgage Fraud, Whistleblower Case,

October 22, 2020

Guild Mortgage Company, based in San Diego, has agreed to pay $25 million to resolve whistleblower-brought allegations of knowingly breaching material program requirements in connection with mortgages insured by the Federal Housing Administration (FHA). As a participant of the FHA’s mortgage insurance program, Guild had the authority to originate and underwrite mortgages without government review for compliance with program rules. According to the former head of quality control, Kevin Dougherty, Guild failed to comply with those rules when it knowingly approved ineligible loans that later defaulted. Dougherty will receive a relator’s share of nearly $5 million. USAO SDCA

Tagged in: FCA Federal, Housing and Mortgage Fraud, Whistleblower Case, Whistleblower Rewards,

April 29, 2020

Lender Guaranteed Rate, Inc. will pay $15.1 million to resolve allegations that it knowingly failed to adhere to material program requirements in originating and underwriting mortgages insured by FHA or guaranteed by the VA, resulting in mortgages that did not meet credit and underwriting requirements for the government-sponsored guarantees and insurance. The case was initiated by a whistleblower complaint filed under the False Claims Act by an unnamed former Guaranteed Rate employee, who will receive $2.4 million of the settlement proceeds. The settlement also resolved claims under FIRREA. DOJ; USAO NDNY

Tagged in: FCA Federal, Financial and Investment Fraud, Financial Institution Fraud, FIRREA, Housing and Mortgage Fraud, Whistleblower Case, Whistleblower Rewards,

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