The DOJ announced that former mortgage lender, James B. Nutter & Company (“Nutter”), has agreed to pay $2.4 million to settle allegations of violating the False Claims Act. The government alleged that Nutter violated the FCA by submitting false statements and certifications to Department of Housing and Urban Development (“HUD”).
Nutter was a Direct Endorsement (“DE”) mortgage lender who underwrote Home Equity Conversion Mortgages (“HECMs”). The HECM program supports senior citizens by allowing them to access equity in their homes through a reverse mortgage insured by Federal Housing Administration (“FHA”). The FHA allows the loan holder to recover from the United States if an FHA-insured loan defaults. To participate in FHA’s HECM program, DE mortgage lenders must comply with HUD underwriting requirements.
According to the government, between January 1, 2007 and December 31, 20202, Nutter failed to comply with the HUD underwriting requirements by allowing inexperienced and temporary staff to underwrite FHA-insured loans. The FHA-insured loans submitted during the foregoing time contained falsified underwriter signatures and the signatures were sometimes affixed before the underwriting review was completed.
Nutter will now pay $2.4 million to resolve the alleged violations. Upon announcement of this settlement, Inspector General Rae Oliver Davis of HUD warned mortgage lenders that “[n]o one is above the law. Our office will continue to work with our partners at the Justice Department to investigate mortgage lenders who jeopardize the integrity of FHA mortgage programs.”
The attorneys at Chilivis Grubman represent clients of all sizes and types in False Claims Act litigation and investigation. If you need assistance with such a matter, please contact us today.