New Jersey Whistleblower Receives $9.4 Million-dollar Whistleblower Award for Alleged Mortgage Fraud
On August 7th, 2017 a New Jersey whistleblower was awarded $9.4 million Tuesday for filing a False Claims Act (FCA), also known as a qui tam complaint. The allegations involved mortgage lender PHH Corporation and the relator questioned the practices with the mortgage company and its filings with the Federal Government. The total qui tam settlement amount was over $74 million dollars. In these actions, a relator or whistleblower is entitled to up to 25% of the settlement amount attributable to the information provided, but at the end of the day $9.4 million dollars is an excellent award for blowing the whistle on allegedly unlawful practices
The complaint alleged PHH failed to comply with federal regulations for loans held by the Federal Government. For a five year span, PHH certified loans for Federal Housing Administration (FHA) insurance, which resulted in major losses for the government.
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“Government mortgage programs designed to assist homeowners—including programs offered by the FHA, VA, Fannie Mae and Freddie Mac—depend on lenders to approve only eligible loans,” said Chad Readler, the acting assistant attorney general for the Civil Division, in a prepared statement. “The department has and will continue to hold accountable lenders that knowingly cause the government to guarantee, insure, or purchase loans that are materially deficient and put both the homeowner and the taxpayers at risk.”
“While we cooperated fully in these investigations since receiving subpoenas in 2013, we concluded that settling these matters is in the best interest of PHH and its constituents,” PHH said. “Adhering to high legal, regulatory and ethical standards is at the core of how we conduct business, and we remain committed to serving our customers and all of our stakeholders consistent with that principle.” The Defendants did not admit to liability, but as qui tam lawyer Jason T. Brown noted, “The apology is in the money.”
Mr. Brown continued by commending the integrity of the relator or whistleblower for coming forward and her counsel and the Department of Justice for advancing the case. There still may be additional exposure for PHH in a different capacity due to a $100 million penalty issued by the Consumer Financial Protection Bureau (CFPB). The CFPB which is supposed to be a vanguard for consumer rights, has been attacked as being an unconstitutional entity by defendants and the defense bar, although to date, there has not been a court of note siding with that argument.