Academy Mortgage Corporation to Pay Over $38.5 Million in FCA Settlement Alleging Improper Mortgage Underwriting Practices
Academy Mortgage Corporation agreed to pay $38.5 million to settle allegations of violating the False Claims Act by improperly originating and underwriting mortgages insured by the Federal Housing Administration (FHA). The relator will receive a whistleblower award in excess of $11.5 million.
According to the settlement, Academy had an underwriting process that led employees to disregard FHA rules and falsely certify compliance with underwriting requirements from January 2008 to April 2017. Subsequently, the government paid insurance claims on Academy’s improperly underwritten loans.
Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division said, “Lenders that knowingly cause the government to guarantee loans that are materially deficient put both homeowners and the public fisc at risk… [T]he settlement announced today is a result of the relator’s efforts to develop this case in litigation and complements the department’s actions to prevent abuse of government programs designed to foster home ownership.”