HUD OIG conducted a civil investigation of an alleged loan origination fraud scheme involving a cash-out refinance loan that was insured by the Federal Housing Administration (FHA). FHA provides mortgage insurance on loans made by FHA-approved lenders to creditworthy borrowers. Borrowers must occupy the properties as their primary residence for at least 1 year. Borrowers certify to their intent to occupy the property when signing the uniform residential loan application and an addendum to the loan application. Based on our investigation, HUD alleged that the borrower falsely certified to HUD in her refinance application documents that she would occupy the subject property as her primary residence. However, she allegedly used the proceeds from her FHA-insured cash-out refinance for a downpayment on another home, which she purchased 1 month after closing the refinance loan and moved into soon thereafter. The borrower defaulted on the loan and FHA incurred a loss when it paid an insurance claim to the lender and sold the property. HUD further alleged that the borrower was liable for the false claim for FHA mortgage insurance under the Program Fraud Civil Remedies Act, 31 U.S.C. (United States Code) 3801-3812, and its implementing regulations at 24 CFR (Code of Federal Regulations) Part 28. The borrower denied that she had violated the Act or HUD regulations. However, on February 11, 2015, she settled with HUD for $15,000 to avoid further expense and administrative proceedings and to reach a satisfactory resolution of the matter. The agreement did not constitute an admission of liability or fault on the part of HUD or the borrower.