January 25, 2016

December 2, 2015

Franklin American Mortgage Company agreed to pay $70 million to resolve allegations it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements.  Specifically, First American audits identified substantial percentages of seriously deficient loans but the company reported very few deficiencies to HUD, causing the FHA to insure hundreds of loans that were not eligible and, as a result, the FHA suffered substantial losses when it later paid insurance claims on those loans.  DOJ

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