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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: Guild Mortgage

Posted  10/30/20
stack of mortgage papers with gavel and money
We’re in the midst of a recession, 13 million Americans are out of work, GDP growth is slowing, and stock market volatility is approaching record-breaking levels. This recession is largely driven by the emergence of a mostly natural and random phenomenon, COVD-19, though there is plenty of blame to go around in how humans have reacted to the spread of the virus. This week’s catch of the week, however, harkens back...

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

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

Top Ten Federal Financial Fraud Recoveries of 2019

Posted  01/17/20
top ten in letters
The U.S. government has a range on enforcement options for financial and investment fraud, including those that provide for whistleblower rewards such as the SEC Whistleblower Program, the CFTC Whistleblower Program, and the IRS Whistleblower Program, each of which are very much open for business and continuing to pay millions of dollars in whistleblower awards in exchange for their assistance in exposing...

December 16, 2019

Steven (Kaveh) Shayan and Kevin (Kaveh) Shayan, who operated the website WeTakeSection8.com, have been permanently banned from offering rental listing services and ordered to pay more than $6 million following a complaint filed by the FTC.  The Shayans and their website falsely claimed that their subscription websites provided accurate, up-to-date rental listings that were approved for Section 8 housing vouchers, including properties with which they had exclusive listing agreements,  when, in fact, most of the listed properties were either unavailable or did not accept Section 8 housing vouchers. FTC

Question of the Week — Will Healthcare Settlements Continue to Dominate False Claims Act Recoveries?

Posted  07/24/19
Recent blockbuster settlements continue past trends: healthcare fraud has so far this year dominated FCA recoveries. During the first half of 2019, the Department of Justice (“DOJ”) secured over $750 million in settlements from False Claims Act (“FCA”) cases. And just past the mid-year point, total recoveries have nearly doubled due to a $700 million civil settlement ($1.4 billion total) entered on July 11th...

June 12, 2019

In connection with the development of the Lakeway Regional Medical Center in Texas, a number of individuals and entities have agreed to pay $1.1 million to resolve claims that they made false claims in obtaining a loan insured by the Federal Housing Administration under a HUD program that insures loans to build hospitals in underserved areas.  Pacific Medical Buildings LLC, PMB Lakeway LLC, RD Development Partners LLC, Lakeway Management LLC, J&L Rush Family Partnership LP, Jeff Rush, and Brad Daniel, were alleged to have delayed refunds to investors who had cancelled their investments in order to make it appear as if the project satisfied mortgage covenants regarding the cash on hand required to close the loan. The settlement also resolves allegations that the settling parties received impermissible distributions of project funds. DOJ

Default by Nursing Home Chain on HUD-Guaranteed Mortgage Highlights Potential for Fraud in Section 232 Program

Posted  06/3/19
Nursing Home with Elderly People
Last week, the New York Times reported on the collapse of Rosewood Care Centers, a chain of nursing homes with facilities in Illinois and Missouri. According to the report, the chain had faced years of operational and financial difficulties, including fines by state regulators, personal injury claims by residents, and lawsuits by investors and vendors. When it went under, Rosewood defaulted on $146 million in...

April 25, 2019

Morgan Stanley will pay $150 million to the State of California to resolve allegations under the California False Claims Act, Corporate Security Law and False Advertising Law, that the bank concealed the risk of residential mortgage-backed securities sold to the California Public Employees’ Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS) between 2003 to 2007. CA

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...
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