New HUD Secretary, Ben Carson, made it clear that FHA is concerned about lenders, especially banks, not participating in FHA lending, due to fears from potential False Claims Act (FCA) actions by the Department of Justice (DOJ). Secretary Carson made it quite clear that HUD wishes to bring more clarity into the FHA lending process when it comes to what…
Ask lenders – and just about all will tell you they do their business the right way. If so, they shouldn’t need to worry about any action from the Department of Justice (DOJ) under the False Claims Act (FCA). Right? With everyone supposedly doing business the right way, why does the DOJ keep finding lenders that violate the rules? Could…
Since 2008, the Department of Justice (DOJ) has drastically increased its use of the False Claims Act (FCA) to go after what say are bad actors in FHA mortgage lending. Since 2009, they have collected fines and penalties totaling more than $7 billion. That ain’t chump change. Many banks discontinued making FHA loans and some nonbank lenders became increasingly more…
Just prior to July 4th, the Department of Justice announced that it hit another lender with a False Claims Act violation and fine. The most recent victim is Prospect Mortgage who was levied a fine of $4.16 million, and another one bites the dust… According to DOJ, once again a lender gets fined for misrepresentations made in connection with FHA-insured…
The other day I posted a blog outlining FHA’s policy on the acceptance of properties encumbered by PACE (Property Assessed Clean Energy) loans for FHA insured financing. If you missed it, (click here). To be fair, here’s the other side of the story. The MBA is concerned that the financing of such properties may have some serious repercussions on the…
This time, it’s Freedom Mortgage to the tune of $113 million. Same story, the Department of Justice, under the False Claims Act, brought the action against Freedom for violations in the FHA insurance program resulting in losses sustained by FHA. About a week ago, Freedom agreed to the settlement without admitting liability, but it cost them big bucks just the…
