ATTORNEY NEWSLETTER
Failure To Meet Program Guidelines Alleged
Allegedly Falsified Applications
How Whistleblower Cases Work
Government-backed lending programs incorporate strict eligibility guidelines for borrowers. Lenders who issue government-insured loans are obligated to follow those guidelines for the loans they submit for government mortgage insurance. All knowingly false submissions under government mortgage insurance programs constitute violations of the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (“FIRREA”). See False Claims Act (FCA), 31 U.S.C. §§ 3729 et seq. and FIRREA, 12 U.S.C. §1833a(c). Individuals with knowledge of knowing violations of the FCA and false claims for payment or reimbursement from the government, may bring an action (called a “qui tam” case) on behalf of the government for the fraud perpetrated against the government. Rewards for the individuals (referred to as “relators”) bringing the actions can equal 15-30% of the amount recovered. 31 U.S.C. § 3730(d). If you have credible information for a false claims whistleblower case on behalf of the federal government in San Francisco or elsewhere in California, call us today at (415)441-8669 and we can help. Our toll-free number is 1-888-50EVANS (888-503-8267).
Recent Case Example[1]
The U.S. Department of Justice (DOJ) recently announced that a former mortgage lender has agreed to pay $2.4 million to resolve allegations that it violated the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 by knowingly underwriting Home Equity Conversion Mortgages (HECM) insured by the Department of Housing and Urban Development (HUD)’s Federal Housing Administration (FHA) that did not meet program eligibility requirements.
“The HECM program helps support our nation’s senior citizens by providing an additional source of funds to supplement their income,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Together with our partners at HUD, we are committed to protecting the financial integrity of this critical program and to pursuing those who seek to abuse it.”
The FHA offers numerous mortgage insurance programs intended to help build and sustain strong communities across America. The HECM program is a reverse mortgage program specifically for senior homeowners aged 62 and older. The program allows seniors to access the equity in their residences, and thereby age in place in their family home, through a mortgage agreement with a lender that is insured against loss by the FHA. The settlement resolves the United States’ allegations in a lawsuit filed in 2020 that a lender knowingly violated FHA underwriting requirements when it allowed inexperienced temporary staff to underwrite FHA-insured loans, and submitted loans for FHA insurance with underwriter signatures that were falsified and/or affixed before all the documentation the underwriter should have reviewed was complete.
“This case sought to redress serious violations of FHA requirements that posed a risk to the HECM program,” said HUD General Counsel Damon Smith. “HUD will continue to protect the integrity of this important mortgage program that serves the interests of our nation’s senior citizens.”
Starting A Qui Tam Action
Any False Claims Act whistleblower case begins by a relator filing a complaint under seal in the federal court usually for the United States District Court for the district where defendant is located or does business. At the same time, the relator submits a disclosure to the DOJ outlining the material evidence the relator has of the alleged false claims. 31 U.S.C. § 3730(b). The seal period of the complaint lasts 60 days during which the DOJ investigates the claims. 31 U.S.C. § 3730(b)(2). (If necessary, the government can, and often does, extend the 60-day period during which the allegations are kept under seal.) If the government decides to intervene in the case, the government essentially takes over the litigation. 31 U.S.C. § 3730(c)(1). If the government declines to intervene, the relator may proceed with the litigation on his or her own. 31 U.S.C. § 3730(c)(3).
Contact Us
If you have credible information of government fraud in San Francisco or elsewhere in California, call Ingrid M. Evans at (415) 441-8669, or toll-free at 1-888-50EVANS (888-503-8267) or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. In addition to FCA and CFCA whistleblower cases, Ingrid and Evans Law Firm, Inc. also handle bank fraud whistleblower cases under FIRREA/FIAFEA, commodity trading and securities fraud under the Commodities Futures Trading Commission Whistleblower Program and the Securities and Exchange Commission Whistleblower Program, and tax fraud under the Internal Revenue Service Whistleblower Program.
[1] Evans Law Firm, Inc. was not involved in the case in any way.
