BUFFALO, N.Y. (Legal Newsline) — The Justice Department has announced M&T Bank Corp. (M&T Bank) has agreed to pay $64 million to resolve allegations of violating the False Claims Act.

M&T Bank allegedly originated and underwrote mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements.

“M&T Bank bypassed its responsibility to originate and underwrite mortgages in accordance with the standards required by the FHA,” said first assistant U.S. attorney James P. Kennedy Jr. for the Western District of New York. “This case demonstrates that when a financial institution takes such a detour, we will work to ensure that it does not bypass the consequences of that conduct.”

The settlement resolves allegations M&T Bank failed to comply with requirements set forth by FHA. The allegations arose from a whistleblower lawsuit brought forth by former M&T Bank employee, Keisha Kelschenbach.

“Mortgage lenders that fail to follow FHA program rules put taxpayer funds at risk and increase the chances of borrowers losing their homes,” said principal deputy assistant attorney general Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to hold lenders accountable for knowingly submitting ineligible loans for FHA insurance.” 


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