(Source: housingwire.com) A little over five years ago, the government sued Allied Home Mortgage, its various entities, and its president and CEO, Jim Hodge for $834 million, claiming that Allied engaged in repeated fraud against the Federal Housing Administration over a 10-year period.
The government claimed that Allied Home Mortgage, Allied Home Mortgage Capital Corporation, at Hodge’s direction committed repeated violations of the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act by falsely certifying the quality of loans insured by the FHA, as well as violating several FHA lending rules.
Now, after a long legal battle, the government secured a victory against Allied Home Mortgage and Hodge, as this week, a federal jury unanimously found Allied Home Mortgage and Hodge liable for civil mortgage fraud.
The jury found that Allied Home Mortgage and Hodge did indeed commit False Claims Act violations and FIRREA violations and awarded the United States a total of $92,982,775 in damages, including $7,370,132 against Hodge.
While it’s a far cry from the $834 million the government initially sought, the damages are eligible for trebling under the terms of the False Claims Act, meaning it could rise to as high as $279 million...