Articles Tagged with mortgage fraud lawyer

In addition to health care fraud and government contracts fraud, the False Claims Act is also essential in the fight against mortgage fraud.  While it is a phrase that few of us knew 15 years ago, mortgage fraud exploded in the first decade of the new millennium and it continues to be a major threat to our nation’s economy.  Individual whistleblowers, people who see fraud and speak up, are the key to fighting back and our mortgage fraud lawyer is proud to partner with them in this important battle.

A Brief Overview of Mortgage Fraud

Before divimortgageng into a recent case, some readers may find a brief definition of mortgage fraud helpful.  In its Mortgage Fraud Overview, the Federal Bureau of Investigations (“FBI”) explains: “Mortgage fraud is a crime characterized by some type of material misstatement, misrepresentation, or omission on a loan which is then relied upon by a lender.”  The FBI goes on to note that there are two broad categories of mortgage fraud: 1) Fraud for housing which is typically perpetrated by a borrower looking to acquire property and 2) Fraud for profit which is typically perpetrated by financial institutions and industry leaders.  Our focus in this post is on the latter, also the type of fraud blamed for the subprime mortgage crisis.

Mortgage lending may not be in the spotlight in 2015 to the same degree it was a few years ago, but it remains an important element of our economy and mortgage fraud was partially responsible for the recession that rocked the globe in the first decade of the millennium.  Although many associate the False Claims Act (“FCA” or “the Act”) with health care fraud, its reach is much broader and includes certain forms of mortgage fraud.   When banks grant federally insured/guaranteed mortgages that do not meet program requirements and the government has to pay out money due to a default, an FCA suit can be appropriate.  As with other FCA claims, private citizens can play an important role in these actions by sharing information about suspected fraud and partnering with our mortgage fraud whistleblower’s lawyer to hold financial institutions responsible for the consequences of granting risky loans.

$212.5 Million Settlement in Mortgage Fraud Case

On June 1, the Justice Department (“DOJ”) issued a press release detailing a recent False Claims Act settlement in the mortgage fraud arena.  As background, the press release explains that First Tennessee Bank (along with its affiliates and successors) participated in the FHA Direct Endorsement Lender (“DEL”) program from January 2006 through October 2008.  Pursuant to the DEL program, neither the Federal Housing Administration (“FHA”) mortgagenor the Department of Housing and Urban Development (“HUD”) reviewed program loans, instead relying on First Tennessee to follow program rules and self-report any deficiencies.

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