IF YOU HAVE EVIDENCE THAT A BANK OR MORTGAGE LENDER HAS DEFRAUDED THE GOVERNMENT BY FRAUDULENTLY REPRESENTING THAT LOANS QUALIFY FOR GOVERNMENT INSURANCE OR INFLATING THE APPRAISAL OF HOMES THAT HAS RESULTED IN $10 MILLION OR MORE IN DAMAGES TO THE GOVERNMENT, YOU MAY BE ELIGIBLE TO RECEIVE BETWEEN 15% AND 30% OF THE GOVERNMENT’S RECOVERY AS A REWARD.
February 29, 2016 – The Financial Crisis of 2007 and 2008 was an unprecedented time in American History. The Financial Crisis caused a Great Recession that led to foreclosures, job losses, market turns, and bailouts. As viewers of the recent award-winning film “The Big Short” know, the Financial Crisis was in part caused by the collapse of the housing market. The housing market collapsed because banks and mortgage lenders fraudulently approved subprime loans and committed mortgage fraud at the expense of the American people.
While the characters in “The Big Short” chose to bet against the market to make a profit, they could have filed a False Claims Act case. Between 2009 and 2015, the United States Government has recovered more than $5 billion in False Claims Act cases related to false claims and civil fraud against federal housing and mortgage programs. Many of these cases were brought under the qui tam provision of the False Claims Act.
The qui tam provisions of the False Claims Act allow an individual, also known as a relator or whistleblower, to file a lawsuit on behalf of the Government against individuals and companies that have defrauded the Government. If the Government is successful in recovering money, the individual may be awarded between 15% and 30% of the total recovery.
Government Insured Loans Must Be Accurate and Meet Certain Requirements to be Eligible
The United States, through the Department of Housing and Urban Development’s Federal Housing Administration (“FHA”) and the Department of Veterans Affairs (“VA”), insures loans made by banks and mortgage lenders to homeowners who meet certain criteria.
When the homeowner defaults, which due to the predatory lending environment before the Financial Crisis happened frequently, the FHA or VA repays the bank or mortgage lender for their loss.
Two of the most common fraudulent acts committed by banks and mortgage lenders related to these Government Insured Loans include:
- Manipulating the information of the homeowner to meet the FHA and VA loan requirements to assure Government insurance; and
- Inflating the price of the home to create a larger overall loan.
Whistleblowers Leading the Way and Being Rewarded
The Government cannot prosecute these banks and mortgage lenders if it does not know about their fraud. It is up to whistleblowers to come forward and expose the banks and mortgage lenders to stop them from unlawfully profiting from their fraud.
Whistleblowers have helped the government recover billions of dollars related to mortgage fraud including:
- A $1.85 billion settlement where Bank of America agreed to pay to settle allegations of the origination of defective residential mortgage loans, the sale of the loans to Fannie Mae and Freddie Mac, and the misrepresentation of those loans insured by the FHA. One whistleblower received more than $57 million as a reward.
- A $1 billion settlement where Bank of America agreed to pay to settle allegations of originating and underwriting FHA insured loans and the inflation of appraisal values of the loans. One whistleblower received $14.5 million as an award.
- A $614 million settlement where JP Morgan Chase agreed to pay to settle allegations of originating and underwriting non-compliant mortgage loans insured by the FHA and VA. The whistleblower received $63.9 million as a reward.
If you have evidence that a bank or mortgage lender has defrauded the Government by fraudulently representing that loans qualify for Government insurance or inflating the appraisal of homes that have resulted in $10 million or more in damages to the Government, contact the whistleblower attorneys at Levy Konigsberg, LLP to discuss your case.