Acting Manhattan U.S. Attorney Settles Civil Mortgage Fraud Lawsuit Against Residential Home Funding Corp

Date Published: 
September 28, 2017
News Type: 
Press Releases
Program Area(s): 
Federal Housing Administration (FHA)

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Dane Narode, Associate General Counsel for Program Enforcement for the U.S. Department of Housing and Urban Development (“HUD”), and Christina Scaringi, the Special Agent in Charge of HUD’s Office of the Inspector General (“HUD-OIG”), Northeast Region, announced today that the United States has settled a civil mortgage fraud lawsuit against RESIDENTIAL HOME FUNDING CORP. (“RESIDENTIAL HOME FUNDING”) stemming from RESIDENTIAL HOME FUNDING’s participation in the Federal Housing Administration’s (“FHA”) Direct Endorsement Lender Program (“DEL Program”). In the settlement, approved Monday by U.S. District Judge Jed S. Rakoff, RESIDENTIAL HOME FUNDING agreed to pay $1.67 million and admitted, acknowledged, and accepted responsibility for, among other things, failing to maintain a compliant quality control program and approving loans for FHA insurance that failed to meet the requirements established by HUD. The settlement amount was based on RESIDENTIAL HOME FUNDING’s financial ability to pay after a review of the company’s financial records. As part of the settlement, RESIDENTIAL HOME FUNDING also agreed to retain an independent compliance consultant to ensure its compliance with the HUD/FHA rules applicable to the DEL Program.

Acting Manhattan U.S. Attorney Kim said: “We are committed to holding lenders accountable when they recklessly approve loans for FHA insurance and then fail to live up to their promises to HUD. With this settlement, Residential Home Funding accepts responsibility for its conduct and will pay $1.67 million.””...