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Housing and Mortgage Fraud

This archive displays posts tagged as relevant to housing and mortgage fraud. You may also be interested in the following pages:

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Catch of the Week — General Electric to Pay $1.5 Billion under FIRREA in Subprime Loan Scheme

Posted  04/12/19
general electric company logo on building
The Department of Justice today announced that General Electric will pay a civil penalty of $1.5 billion under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) to resolve claims of fraud involving the marketing of subprime residential mortgage loans.  The loans at issue originated by a GE subsidiary, WMC Mortgage.  The government alleged that WMC, GE, and their affiliates allegedly...

March 7, 2019

A landlord participating in a federally funded rent subsidy program for low-income tenants has agreed to settle allegations of violating the False Claims Act. In order to receive housing assistance funds from the Department of Housing and Urban Development (HUD), Harold Joseph Tyler of Tyler Realty Group had certified that he would not charge more rent than was agreed upon. According to a tenant who filed the qui tam complaint that launched the investigation, however, Tyler effectively charged additional rent in the form of a recurring "non-refundable deposit" of nearly $200 per month. USAO EDVA

Top Ten Federal Financial Fraud Recoveries of 2018

Posted  01/25/19
Wooden gavel and handcuffs on top of U.S. currency
While 2018 has been a banner year for FCPA, Tax, and SEC & CFTC recoveries, in the bottomless pit of financial frauds that hurt taxpayers, the government, consumers, investors, and the American economy, 2018 brought us additional stunning recoveries for violations related to residential-mortgage backed securities, international economic sanctions, consumer protection, anti-money-laundering, EB-5 investment fraud, and...

December 21, 2018

Mortgage servicing company Compu-Link Corporation, also known as Celink, will pay $4.25 million to settle a False Claims Act case alleging that it improperly obtained FHA insurance payments on reverse mortgages under the Home Equity Conversion Mortgages program despite knowing that the mortgagees in question were not eligible to receive the FHA payments.  USAO MD Fla

December 12, 2018

Finance of America Mortgage LLC has agreed to pay $14.5 million to the United States to resolve its liability under the False Claims Act in connection with deficient mortgage loans originated by a company it acquired. The acquired company, Gateway Funding Diversified Mortgage Services, L.P. (Gateway), had participated in the Federal Housing Administration's insurance program as a direct endorsement lender (DEL), which gave it the authority to originate, underwrite, and endorse mortgages with minimal oversight from the FHA. However, as reported by a former Gateway employee in a qui tam complaint, the company failed to comply with the stricter procedures required of DELs, including failing to conduct audits on early-payment default loans, repeatedly failing to correct high rates of default, and failing to self-report deficient loans to the FHA. For exposing the fraud, the unnamed relator will receive a share of $2,392,500. USAO NDNY

December 4, 2018

The New York law firm of Rosicki, Rosicki & Associates, P.C., and two firms affiliated with it, have agreed to settle a False Claims Act action alleging that in performing legal work including foreclosure and eviction services for the Federal National Mortgage Association (Fannie Mae) and the Veterans Administration, the entities submitted bills for costs that were not actual, reasonable, and necessary.  Instead, the false claims for payment included improper mark-ups and other unauthorized charges.  Defendants will pay a total of $6.1 million to the United States, and have agreed to implement a compliance program.  The case was originally brought by whistleblower Peter D. Grubea.  USAO SDNY

November 20, 2018

Peter Cash Doye and Raquel Reid were convicted for defrauding lenders into providing over $50 million in loans purportedly secured by four multi-million dollar mansions in La Jolla and Del Mar, California.  Doye, an executive at several real estate investment firms, and Reid, a broker, created forged real estate lien “releases” and recorded fraudulent records at the San Diego County Recorder’s Office to make it appear that the loans had been paid off so they could obtain additional loans from new lenders. Reid notarized the forged documents, helping to make the fraudulent paperwork appear authentic.  USAO S.D. Cal.

November 8, 2018

The United States has brought charges against UBS AG and several of its affiliates, alleging that UBS defrauded investors in connection with its sale of residential mortgage-backed securities (RMBS) in 2006 and 2007.  The complaint accuses UBS of affirmatively misleading investors and withholding crucial information from them about the quality of billions of dollars in subprime and Alt-A mortgage loans backing 40 RMBS deals. USAO EDNY; DOJ

Catch of the Week — Universal American Mortgage Company

Posted  10/19/18
Universal American Mortgage Company (UAMC), a Miami-based mortgage company, agreed on October 19 to a $13.2 million settlement to resolve allegations that it violated the False Claims Act (FCA) by falsely certifying that it complied with Federal Housing Administration (FHA) mortgage-insurance requirements in connection with certain loans. UAMC is part of Lennar, one of America’s leading homebuilders. The...

October 19, 2018

Settling a case brought by a whistleblower, mortgage lender Universal American Mortgage Company will pay $13.2 million to the United States.  UAMC acted as a direct endorsement lender in the Federal Housing Administration insurance program, originating and underwriting mortgages with FHA insurance.  Because the federal government is liable for FHA loans that default, DELs such as UAMC are required to follow underwriting and quality control rules in issuing mortgages; UAMC allegedly did not follow those rules and knowingly submitted loans for FHA insurance that did not qualify.  The whistleblower, Kat Nguyen-Seligman, a former employee of a UAMC related entity, will receive $1,980,000 from the settlement.  DOJ; USAO W.D.Wa.
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