The Department of Justice has announced that it has recovered $2.47 million from a mortgage lender under the False Claims Act (FCA). The settlement agreement resolves allegations that the lender knowingly originated and underwrote hundreds of Home Equity Conversion Mortgage loans insured by the Federal Housing Administration that did not meet Department of Housing and Urban Development requirements.
The allegations involve a reverse mortgage program for seniors. The program allows senior homeowners to withdraw equity from their homes to supplement their income. The government alleged that the lender ordered appraisals for loans, using a form that improperly communicated loan amounts in an attempt to influence the appraised value.
This latest settlement reiterates the government’s continued focus on combatting fraud affecting seniors with the FCA.
The settlement discussed above is based on allegations only. There has been no determination of guilt or liability.