Archive

November 1, 2016

The City of Fairfield, California and the Fairfield Housing Authority paid $680,000 to settle False Claims Act allegations that they received grants to fund two coordinator positions for a federal housing program but did not use the funds for that purpose.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by a former FHA employee.  The whistleblower will receive a whistleblower award of roughly $129,000 from the proceeds of the government's recovery.  DOJ (EDCA)

October 27, 2016

The SEC charged Los Angeles-based investment advisory firm Broidy Wealth Advisors and its owner Marc D. Broidy with fraudulently overbilling clients and stealing assets from client trust accounts to pay for personal expenses including a home mortgage, overseas trips, and leases on two Mercedes-Benz vehicles.  The SEC alleges that Broidy obtained more than $1.4 million in ill-gotten gains since February 2011.  Broidy allegedly billed clients approximately $643,000 in excess fees and covered it up by altering the amount of management fees recorded on forms issued by brokerage firms before sending the forms to his clients.  The SEC further alleges that Broidy fraudulently took approximately $865,000 from clients’ trust accounts on which he was trustee to pay personal expenses.  SEC

November 2, 2016

New York announced a $1.6 million settlement with Queens-based American Hope Group, Inc. and its principal, Mauricio Villamarin Martinez (collectively “American Hope Group”), following an investigation into a fraudulent mortgage rescue scheme that preyed upon financially vulnerable Hispanic homeowners who were desperate to save their homes from foreclosure. The AG’s investigation found that American Hope Group collected millions of dollars in monthly fees from consumers, yet routinely failed to deliver on its promises to provide substantial relief from unaffordable mortgage payments through loan modifications and other forms of foreclosure prevention. The settlement, a Consent Order, concludes the AG’s investigation into American Hope Group’s mortgage rescue scheme. NY

October 27, 2016

The CFPB issued issuing warning letters to 44 mortgage lenders and mortgage brokers who may be in violation of requirements to collect, record, and report data about their housing-related lending activity under the Home Mortgage Disclosure Act.  CFPB

October 3, 2016

Salt Lake City-based mortgage lenders Primary Residential Mortgage Inc. and SecurityNational Mortgage Company agreed to pay $5 million and $4.25 million, respectively, to resolve separate allegations that they violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the Department of Housing and Urban Development’s Federal Housing Administration that did not meet applicable requirements.  DOJ

September 29, 2016

North Carolina-based Branch Banking & Trust Company agreed to pay $83 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s Federal Housing Administration that did not meet applicable requirements.  As part of the settlement, BB&T admitted that it certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s quality control requirements.  DOJ

September 22, 2016

The operators of an alleged mortgage relief scam that preyed upon distressed homeowners are banned from the mortgage loan modification and debt relief business under a court order obtained by the FTC. The order stems from a case the FTC brought in July 2014 against five defendants as part of a federal-state law enforcement effort called Operation Mis-Modification. According to the FTC, the defendants, operating under the fictitious names “2Apply” and “UW Solutions,” falsely claimed they could lower consumers’ mortgage payments and interest rates or prevent foreclosure, pretended to be affiliated with a government agency or consumers’ lenders or servicers, and illegally charged advance. The final orders impose a judgment of more than $1.7 million and bans defendants from selling secured or unsecured debt relief products or services. FTC

September 12, 2016

Birmingham-based Regions Bank agreed to pay $52.4 million to settle charges that 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.  According to the government, Regions’ misconduct caused HUD to incur substantial losses by paying insurance claims for loans not eligible for FHA mortgage insurance.  Whistleblower Insider

September 1, 2016

The principals of a mortgage relief operation and their companies, Edward William Rennick III, Surety Law Group LLP and Redstone Law Group LLC, are banned from the mortgage loan modification and debt relief business under court orders obtained by the FTC. The orders resolve charges that the scheme falsely promised financially distressed homeowners they would receive legal representation to prevent foreclosure or lower their mortgage payments and interest rates, and illegally charged thousands of dollars in advance. FTC

August 10, 2016

Lincoln Military Housing, which owns and operates dozens of on-base and off-base military housing communities throughout Southern California, agreed to pay $200,000 to resolve allegations that it unlawfully evicted active-duty servicemembers and their families by obtaining default judgments against them in violation of the Servicemembers Civil Relief Act (SCRA).  According to the government, Lincoln Military requested default judgments against servicemembers without filing the affidavits required by the SCRA to alert the court of the tenants’ military status.  This put servicemembers at risk of being evicted without having an opportunity to participate in the case and without having an attorney assigned to represent them.  DOJ