Utah-based company accused of improperly originating and underwriting mortgages insured by FHA.
A Utah-based mortgage company has agreed to pay nearly $40 million to settle allegations that it improperly originated and underwrote mortgages insured by the federal government.
According to a U.S. Department of Justice news release, Academy Mortgage Corp., based in Draper, Utah, did not admit guilt in agreeing to pay $38.5 million to resolve allegations it violated the U.S. False Claims Act by improperly issuing mortgages insured by the Federal Housing Administration (FHA).
The settlement, announced Wednesday, resolves a lawsuit filed by Gwen Thrower, a former Academy underwriter, under the whistleblower provisions of the False Claims Act. The provisions allow a private party (known as a relator) to file a lawsuit on behalf of the U.S. and to receive a portion of any recovery.
In her lawsuit filed in the Northern District of California, Thrower claimed that from January 2008 through April 2017, Academy had an underwriting process that led employees to disregard FHA rules and falsely certify compliance with underwriting requirements. She also alleged that, as a result of Academy’s knowingly deficient underwriting practices, the government paid insurance claims on loans that were improperly underwritten.
Under terms of the settlement, Academy will pay $38.5 million to the United States. Thrower will receive $11,511,500 as her share of the proceeds.
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