May 16, 2017

Austin-based Financial Freedom agreed to pay more than $89 million to resolve charges it violated the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) in connection with its participation in a federally insured Home Equity Conversion Mortgages or “reverse mortgage” program.  According to the government, Financial Freedom sought to obtain insurance payments for interest from the Federal Housing Administration despite failing to properly disclose the mortgagee was not eligible for such interest payments because it had failed to meet various deadlines relating to appraisal of the property, submission of claims to HUD, and pursuit of foreclosure proceedings.  The allegations originated in a whistleblower declaration filed pursuant to FIRREA by Sandra Jolley, a consultant for the estates of borrowers who took out HECM loans.  She will receive a whistleblower award of $1.6 million from the proceeds of the government’s recovery. DOJ

Tagged in: FCA Federal, FIRREA, Housing and Mortgage Fraud, Whistleblower Case, Whistleblower Rewards,