Banks have not yet finished with the wave of lawsuits stemming from the financial crisis. There are ways they can better ward off those threats next time around.
HUD Secretary Ben Carson told lawmakers that overly rigid False Claims Act enforcement had forced lenders to suffer financially for what were just minor errors, but that lenders' fears of being sued were dissipating.
HUD Secretary Ben Carson has spent much of his first year trying to convince lenders they wouldn't be harshly penalized if FHA-guaranteed loans went bad. But he still has a ways to go.
Trump officials have made clear their intent to reexamine how Federal Housing Administration lenders are cited under the False Claims Act, but whether that means lenders can rest easier is an open question.
The HUD secretary’s comment that such use of the False Claims Act was “ridiculous” may delight the mortgage industry but does not bode well for taxpayers or the federal government’s future fraud enforcement efforts.
For the past eight years, Brian Montgomery has helped mortgage lenders fight penalties sought by the Federal Housing Administration. Now he's President Trump's nominee to lead the agency.
A federal judge awarded treble damages totaling $296 million in a False Claims Act case alleging Texas lender Allied Home Mortgage defrauded the Federal Housing Administration mortgage program.
