Indian Land, S.C., mortgage lender Movement Mortgage has agreed to pay $23.7 million to settle allegations of false claims submissions involving federal mortgage programs, authorities said.
Federal prosecutors said Thursday their investigation was triggered by a whistleblowers’ lawsuit from two former Movement Mortgage workers. They will receive $4 million of the settlement.
The whistleblowers accused the company of underwriting loans for people whose income and other requirements did not meet standards for the Federal Housing Administration and Veterans Affairs loan programs, said attorney Nelson Thomas. He’s a founding partner of the law firm which handled the whistleblowers’ case, Thomas and Solomon LLP of Rochester, New York.
The alleged conduct dated back to July 2008, and included a period of rapid expansion for the company, Carla Freedman, the U.S. Attorney for the Northern District of New York, said in a news release. Movement Mortgage underwrote loans across the country, including in upstate New York.
Mortgage Movement admitted it certified “a material percentage of loans” that did not meet FHA mortgage insurance and VA home loan guarantee requirements despite inaccurately representing that the loans complied with the requirements, Freedman said.
The company also acknowledged that the agencies would not have insured or guaranteed the loans except for its submission of false certifications, Freedman said.
“Today’s settlement holds Movement Mortgage...
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