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Universal American Mortgage Company LLC (UAMC) has agreed to pay the United States $13.2 million to resolve allegations that it violated the False Claims Act by falsely certifying that it complied with Federal Housing Administration (FHA) mortgage insurance requirements in connection with certain loans, the Department of Justice announced today.  UAMC is a mortgage lender headquartered in Miami, Florida.

“Mortgage lenders may not ignore material FHA requirements designed to reduce the risk that borrowers will be unable to afford their homes and federal funds will be wasted,” said Assistant Attorney General Joseph H. Hunt for the Department of Justice’s Civil Division.  “We will hold accountable entities that knowingly fail to follow important federal program requirements.”

“FHA mortgages are vital to first-time homebuyers and to families whose credit and assets were damaged by the 2008 economic crisis,” said U.S. Attorney Joseph H. Harrington for the Eastern District of Washington.  “FHA underwriting and other requirements are critical to safeguarding the integrity of the public money used to operate this important program.  We will continue to work with our law enforcement partners to ensure that mortgage lenders and others who profit from this program, while ignoring its rules, will be held accountable.”  

“In a quest for profits, mortgage companies have ignored important lending standards” said U.S. Attorney Annette L. Hayes for the Western District of Washington.  “Not only does this harm the borrowers leaving them over their heads in debt and underwater on their mortgages, it harms taxpayers because the mortgages are backed by government insurance.  This settlement should serve as a warning to other lenders to diligently follow the rules.”...