0
0
Here is some good news about the new administration. The word on the street is that the Department of Justice is in the process of dismantling their multi-agency task force put in place to seek out potential legal actions against lenders under the False Claims Act. The reason being is that President-elect Trump will be nowhere near as aggressive in pursuing these actions as is the current administration.
This does not signal a return to the days of the Wild West where anything goes. But, it does send a message that lenders may be a little safer when doing FHA business. The belief is that once in place, the new Attorney General will not use False Claims Act litigation as a hammer against lenders for minor, technical loan defects.
If lenders believe this is a free pass to skirt the rules, they’ll find they are sorely mistaken and may kill the goose that lays the golden eggs. If there is one thing the crash should have taught lenders is that quality and compliance in mortgage lending really does matter. The difference now will be that when making a good faith effort to do things right, they won’t be excessively panelized for minor infractions.
Remember, even though the DOJ may back off a little, HUD and the IG are still there to pursue actions against the bad actors. In the end, it will be up to the new AG to determine what course of action will be taken down this road. However, as with the current AG, some direction will most likely come from the Executive Branch.
The hope is that direction will change for the better.
