The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), referred alleged violations to HUD’s Office of Program Enforcement for action under the Program Fraud Civil Remedies Act based on two audits of DHI Mortgage Company Ltd. (DHIM) that found it did not follow HUD requirements when it underwrote Federal Housing Administration (FHA)-insured loans with prohibited restrictive addenda to the purchase contracts. On February 2, 2016, HUD filed a complaint, and an amended complaint on June 7, 2016, under the Program Fraud Civil Remedies Act of 1986, 31 U.S.C. (United State Code) 3801-3812, as implemented by 24 CFR (Code of Federal Regulations) Part 28, against DHIM. The actions were based upon the alleged submission of false statements to HUD by DHIM in its application for FHA insurance for 168 mortgage loans. DHIM denied HUD’s allegations.
On July 6, 2016, DHIM entered into a settlement agreement with the HUD. To arrive at a mutually satisfactory resolution of the matter without the time and expense of further administrative proceedings, DHIM agreed to pay HUD $180,000 for alleged violations concerning but not limited to the 168 loans. The settlement agreement did not constitute an admission of liability or fault by any party.