Lender accused of not following guidelines for originating, underwriting some FHA, VA loans.

KEY TAKEAWAYS

• Settlement resolves whistleblower allegations that lender failed to comply rules for lenders of government-backed loans.
• The whistleblowers, 2 former Movement employees, will receive more than $4 million of the settlement proceeds.
• Movement said the settlement is 'not an admission of any legal liability.'

Movement Mortgage LLC has reached an agreement with the Justice Department to pay nearly $24 million to resolve whistleblower allegations that it failed to follow guidelines for originating and underwriting loans backed by the federal government.

The settlement agreement, which includes a penalty of $23.75 million, was announced June 29 by the U.S. Attorney’s Office for the Northern District of New York. Movement Mortgage is based in Indian Land, S.C., but underwrites loans across the United States, including in upstate New York.

According to U.S. Attorney Carla B. Freedman, Movement Mortgage violated the federal False Claims Act by “failing to comply with material program requirements” when it originated and underwrote mortgages insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA).

“Lenders participating in mortgage programs backed by taxpayers must follow rules designed to protect both program integrity and homeowners,” Freedman said. She added that...

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