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

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