Allegations that the Federal Housing Administration was defrauded on mortgages it insured have been settled for $1 billion. The settlement, which is the biggest of its kind, also resolves allegations of inflated appraisals and abuse with the government’s loan modification program.
The settlement with the Department of Housing and Urban Development is "the largest ever False Claims Act settlement relating to mortgage fraud," the Department of Justice said Thursday in a statement.
According to the announcement, the settlement resolves civil claims by the government that FHA lost hundreds of millions of dollars because of a mortgagee that had allegedly been "recklessly and fraudulently underwriting loans to unqualified borrowers."
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