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mortgage fraud 19 articles

Whistleblower Case Recovers $14.5 Million From Finance of America Mortgage

A whistleblower was instrumental in helping the U.S. recover $14.5 million in Federal Housing Administration (FHA) insurance funds from Gateway Funding Diversified Mortgage Services, which Finance of America Mortgage LLC acquired in 2015. Debra McGeehan, a former quality control underwriter for Gateway, filed a lawsuit on behalf of the U.S. government under the whistleblower provisions of the False Claims Act. She alleges that Gateway knowingly originated and underwrote mortgage loans that did not qualify for FHA insurance. When borrowers defaulted on their mortgages, FHA (i.e. U.S. taxpayers) got stuck with the bill. Gateway participated as a direct endorsement lender (DEL) ... Read More

New York Law Firm Pays U.S. $6.1 Million to Settle False Claims Case

A New York law firm specializing in mortgage foreclosures has agreed to pay the U.S. more than $6 million to settle allegations that it caused the submission of false claims to Fannie Mae with inflated service expenses. The U.S. Attorney for the Southern District of New York announced the agreement, saying that Rosicki Rosicki & Associates and its wholly owned affiliates, Enterprise Process Service and Paramount Land, “systematically generated false and inflated bills for foreclosure-related and eviction-related expenses,” and then caused the submission of those expenses to Fannie Mae. Fannie Mae approved Rosicki to perform legal work in connection with ... Read More

Whistleblower Helps U.S. Recover $13.2 Million With Mortgage Fraud Case

A whistleblower has helped the U.S. government recover $13.2 million from Universal American Mortgage, a subsidiary of Lennar Homes that does business as Eagle Home Mortgage, in a settlement resolving allegations of mortgage fraud. The settlement with Eagle Home is the latest in a long series of mortgage fraud cases that the U.S. has litigated since the subprime mortgage crisis that helped plunge the U.S. into a deep recession. As with the other cases, many of which were initiated by a whistleblower action, the Eagle Home settlement resolves allegations that it falsely certified the mortgages it underwrote complied with Federal ... Read More

Wells Fargo Blames Hundreds of Home Foreclosures on Calculating Error

Wells Fargo said a software glitch in its mortgage loan modification underwriting tool led to hundreds of its customers losing their houses to foreclosure. In its latest quarterly filing with the U.S. Securities and Exchange Commission (SEC), Wells Fargo said that the calculation error caused about 625 customers to either be incorrectly denied a government-sponsored mortgage loan modification or not offered a loan modification when they would have qualified. “In approximately 400 of these instances, after the loan modification was denied or the customer was deemed ineligible to be offered a loan modification, a foreclosure was completed,” Wells Fargo said ... Read More

PPH Corp Settles Mortgage Fraud Whistleblower Case

PPH Corp. and subsidiary companies have agreed to pay the U.S. more than $74 million to settle a whistleblower lawsuit and a federal investigation into flawed home loans that ended up costing taxpayers millions of dollars, the U.S. Department of Justice (DOJ) announced Tuesday, Aug. 8. PPH Corp., PPH Mortgage Corp., and PPH Home Loans settled the pair of lawsuits in Minnesota and New York federal courts, closing an investigation opened by the U.S. Attorney’s Office in Minnesota in 2013 and a lawsuit filed by a former PPH employee on behalf of the U.S. under the whistleblower provisions of the ... Read More

Wells Fargo Pays $108 Million For Allegedly Defrauding Veterans

Wells Fargo & Co. has agreed to pay $108 million to settle a whistleblower lawsuit alleging the bank hit veterans with unauthorized fees on mortgage refinance loans and then hid those fees from the government when it applied for federal loan guarantees. The settlement brings to a close a protracted dispute brought by whistleblowers Victor Bibby and Brian Donnelly, both Georgia mortgage brokers, who sued the bank on behalf of the U.S. government in 2006 under the False Claims Act. The lawsuit remained under seal until 2011, when federal prosecutors declined to intervene in the case. Mr. Bibby and Mr. ... Read More

Prospect Settles Mortgage Fraud Allegations

Prospect Mortgage LLC on Monday agreed to pay the U.S. more than $4 million to resolve allegations that it approved mortgage loans for federal insurance that failed to meet Federal Housing Administration (FHA) standards. The settlement is the latest deal resulting from a federal crackdown on banks and mortgage companies that allegedly contributed to the financial crisis of 2008-2009. Federal prosecutors said the July 3 deal settles a False Claims Act lawsuit the U.S. government brought against Prospect Mortgage. According to the announcement, the California-based lender participated as a direct endorsement lender (DEL) in the Federal Housing Authority’s insurance program. ... Read More

U.S. Judge Denies Quicken Loans Motion To Dismiss FCA Lawsuit Alleging Mortgage Fraud

A federal judge in Detroit rejected a motion last week by Quicken Loans to toss a False Claims Act (FCA) complaint alleging that it knowingly approved mortgage loans that did not meet the qualifications for FHA insurance. In his Feb. 9 ruling, U.S. District Judge Mark Goldsmith allows the FCA suit against Quicken Loans to advance, but reduced the time-frame by nearly half due to the statute of limitations. The U.S. Department of Justice (DOJ) brought the complaint against Quicken Loans, alleging that the ignored “red flags” in risky home loans that failed to meet federal standards for FHA insurance. The ... Read More

SCOTUS Revives Whistleblower Case Against Wells Fargo In Light of Escobar Ruling

The U.S. Supreme Court on Tuesday, Feb. 21 revived a long-running whistleblower lawsuit against Wells Fargo by remanding it to the U.S. Second Circuit Appeals Court, which last year affirmed a lower court’s ruling dismissing the case. The case was filed by Robert Kraus and Paul Bishop, former officials of two banks Wells Fargo acquired. Mr. Kraus and Mr. Bishop brought the complaint in 2011 under the whistleblower provisions of the False Claims Act, which allows private parties to sue on behalf of the government in cases of suspected fraud targeting federal agencies and programs. Mr. Kraus is former controller ... Read More

Trump Admin Poised to Dismantle Consumer protections

Less than two weeks from taking over the Oval Office, Donald Trump and his administration vowed to cut the vast majority of business regulations – a measure that would likely lead to the demise of the Consumer Financial Protection Bureau (CFPB), the watchdog agency designed to protect U.S. consumers from the kinds of predatory lending practices that precipitated the 2008 financial crisis and housing crisis. The CFPB was designed by consumer advocates to be an autonomous agency, free from the grip of special interests that often influence Congress. Because it is funded by the Federal Reserve, the bureau does not ... Read More