U.S. Government Settles FCA Suit Against Mortgage Lender for $32.5 Million

A large national mortgage lender has reportedly agreed to pay the U.S. government $32.5 million in order to settle a False Claims Act lawsuit against the company.  The case had been pending in federal court for almost three years before the matter was settled and dismissed with prejudice on June 14, 2019, in the Eastern District of Michigan.  This agreement comes nearly two months after the court ordered the parties to mediation.

This action stemmed from a DOJ and HUD Office of Inspector General joint investigation into alleged False Claims Act violations regarding the lender’s origination and underwriting of FHA loans.  The specific details of the settlement have not yet been released.  However, according to national news outlets, the total settlement amount represents $25.5 million in alleged losses incurred by the government, and an additional $7 million in interest.