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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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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

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

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

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, LLCNM

Court of Appeals Upholds SEC Denial of Whistleblower Award

Posted  02/18/21
Bicycle messenger blurred by speeding on street
A whistleblower who was denied an award by the SEC lost his appeal to the Court of Appeals for the D.C. Circuit, resulting in a rare court opinion addressing the SEC Whistleblower Reward Program. The court agreed with the SEC that the whistleblower, who had reported information regarding Bank of America and argued that he had worked extensively with DOJ, had not shown that he was entitled to a whistleblower award from...

Eleventh Circuit Revives VA Mortgage Fraud Whistleblower Case

Posted  01/22/21
By Leah Judge
mortgage papers with gavel, cash and magnifying glass
Last week, a three-judge panel on the Eleventh Circuit breathed new life into a fifteen-year-old mortgage fraud lawsuit brought by two whistleblowers under the False Claims Act.  The opinion, United States ex rel. Bibby v. Mortgage Investors Corporation adds another voice to the chorus of circuit courts applying the Supreme Court’s landmark 2016 ruling on the FCA’s “materiality” standard, Universal Health...

Top Ten Non-Healthcare False Claims Act Recoveries of 2020

Posted  01/14/21
Lincoln bill zoomed on his face
This year’s Top Ten Non-Healthcare False Claims Act Recoveries demonstrates the False Claims Act’s power to combat an array of corporate misconduct spanning diverse industries. In 2020, the United States recovered hundreds of millions in taxpayer funds obtained through claims rendered false by bribery and bid-rigging schemes, mortgage underwriting fraud, avoided import duties, fraudulent loan applications, and...

Top Ten Federal Financial Fraud Recoveries of 2020

Posted  01/14/21
man pocketing cash in suit
The U.S. government has many 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.  These programs, along with a new one under the Anti-Money-Laundering Act of 2020, are open for business and promise to pay millions of dollars in whistleblower awards in...

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
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