Quantcast

LEGAL NEWSLINE

Thursday, March 28, 2024

Suit filed against Guild Mortgage for alleged violations of False Claims Act

General court 02

shutterstock.com

WASHINGTON (Legal Newsline) – The Justice Department announced that the United States is suing Guild Mortgage in the U.S. District Court for the District of Columbia for allegedly violating the False Claims Act by improperly originating and underwriting mortgages insured by the Federal Housing Administration (FHA).

As a direct endorsement lender in the FHA insurance program, Guild could originate and underwrite certain mortgages for FHA insurance, the DOJ claims. The United States is at risk when a loan of this type defaults as it is responsible for the losses. The U.S. Department of Housing and Urban Development therefore relies on lenders to follow program rules.

According to the government’s complaint, Guild knowingly submitted hundreds of claims for underwritten FHA-insured loans that were done improperly from 2006 to 2011. Additionally, Guild purportedly grew its FHA lending business by ignoring FHA rules.

“This case is another example of the Justice Department’s continued efforts to ensure that lenders that participate in the FHA mortgage insurance program act in good faith and conduct appropriate due diligence when committing the United States to insure home loans,” Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, said. “To protect the housing market and the FHA fund, we will continue to hold responsible lenders that knowingly violate the rules.”

More News