We received a referral from the Quality Assurance Division of the U.S. Department of Housing and Urban Development’s (HUD) Philadelphia Homeownership Center concerning a borrower who allegedly made false statements to obtain Federal Housing Administration (FHA) mortgage insurance. The borrower provided false and conflicting employment and income information, which was used in originating and obtaining an FHA loan. Further, the borrower certified that he intended to reside in the property but failed to do so. We referred the violations to HUD’s Office of Program Enforcement for action under the Program Fraud Civil Remedies Act.
On December 4, 2009, the borrower obtained an FHA loan to purchase a property in Baltimore, MD. The borrower falsely certified his employment and income information when he signed the uniform residential loan application. The borrower also falsely represented on the loan application that he intended to occupy the property as his personal residence. The property was vacant and was being offered for rent in May 2010, 6 months after the settlement date. The borrower’s actions violated FHA requirements. On November 17, 2016, HUD’s Office of Program Enforcement filed a complaint against the borrower under the Program Fraud Civil Remedies Act. After negotiations with HUD, the borrower agreed to pay $10,000 to settle the matter. The agreement did not constitute an admission of liability or fault by any party. The borrower made an initial payment of $2,000 on April 11, 2017, and agreed to a repayment plan for the remaining $8,000.