(Reuters) - Utah-based lender Academy Mortgage Corp will pay $38.5 million to resolve claims it improperly originated and underwrote mortgages as part of a settlement of a whistleblower lawsuit that proceeded over the U.S. Department of Justice's objections.
The settlement was announced on Wednesday by the Justice Department, whose approval was necessary to finalize a deal that Academy Mortgage struck with a former employee who sued the company on the government's behalf under the False Claims Act.
The lawsuit, brought by former Academy Mortgage underwriter Gwen Thrower, accused the company of falsely certifying loans for Federal Housing Administration insurance that did not meet government requirements. Academy did not admit wrongdoing as part of the settlement.
She pursued the case even after the Justice Department sought unsuccessfully to dismiss it over objections, a step the department has increasingly taken under a 2018 policy encouraging it to seek the dismissal of "meritless" cases.
"She is an incredible person who stayed the course even when the government did not believe in her case," Joshua Russ, her lawyer at Reese Marketos, said in a statement. "We need more people like Gwen Thrower in this world."
As an award, Thrower will receive $11.5 million as her share of the settlement, the department said.
Lawyers for Academy Mortgage did not respond to requests for comment.
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