WASHINGTON (Legal Newsline) — The U.S. Department of Justice announced Aug. 8 that PHH Corp., PHH Mortgage Corp. and PHH Home Loans (collectively, PHH) will pay $74,453,802 to resolve allegations of violating the False Claims Act.
PHH underwrote mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA), guaranteed by the United States Department of Veterans Affairs (VA), and purchased by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”). According to allegations, PHH knowingly underwrote loans that did not meet applicable requirements to receive FHA insurance.
“Government mortgage programs designed to assist homeowners — including programs offered by the FHA, VA, Fannie Mae and Freddie Mac — depend on lenders to approve only eligible loans,” said acting assistant attorney general Chad A. Readler, head of the Justice Department’s Civil Division.
“The department has and will continue to hold accountable lenders that knowingly cause the government to guarantee, insure or purchase loans that are materially deficient and put both the homeowner and the taxpayers at risk.”
“PHH submitted defective loans for government insurance, and homeowners and taxpayers paid the price," said acting U.S. attorney for the District of Minnesota Gregory Brooker. "This significant resolution helps rectify the misconduct by returning more than $74 million in wrongfully claimed funds to the government.”