HUD OIG assisted in an investigation into alleged violations of Federal Housing Administration (FHA) regulations applicable to the direct endorsement program by Golden First Mortgage Corporation and its owner. Golden First is a former FHA-approved mortgage lender, with its principal place of business located in Great Neck, NY. Golden First participated in the direct endorsement program from 1989 until 2010. As a direct endorsement lender, Golden First had the authority to approve mortgage loans for FHA insurance. On April 4, 2013, and August 13, 2013, the U.S. Attorney’s Office of the Southern District of New York filed a complaint and an amended complaint, respectively, against Golden First and its owner for not complying with FHA requirements. The Government alleged that from 2002 to 2010, Golden First and its owner submitted false certifications to FHA and HUD concerning compliance with program rules and endorsed loans in violation of these rules. As a result, the Government incurred substantial losses in connection with loans that Golden First underwriters, including the owner, endorsed for FHA insurance during the covered period. The Government’s complaint further alleged that Golden First and its owner were liable under the False Claims Act, 31 U.S.C. (United Stated Code) 3729 et seq.
On December 31, 2014, the U.S. District Judge approved a settlement, in which Golden First and its owner admitted, acknowledged, and accepted responsibility for failing to follow certain requirements of the direct endorsement program. To settle the matter, Golden First and its owner agreed to a judgment of $36 million against Golden First and a $300,000 payment from the owner. Additionally, the owner is permanently debarred from conducting any business with the Federal Government.