Consumer Finance Insights
December 3, 2015

Mortgage Lender Settles with DOJ for Allegedly False FHA Loans

​On December 1, the U.S. Attorney for the District of Colorado, working on behalf of the U.S. Department of Housing and Urban Development (HUD), announced a settlement agreement with a residential mortgage lender originating and underwriting loans insured by HUD’s Federal Housing Administration (FHA).  The settlement resolves allegations that, between January 2007 and March 2013, the lender endorsed 96 loans that defaulted within the first two years of the loan.  Based on a three year investigation by the HUD Office of the Inspector General, the government alleged that for some of these loans, the company failed to comply with HUD rules and regulations.

To settle these claims, the mortgage lender agreed to pay the federal government $1,032,714.96 over the next three years, but made no admission of liability.