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The term “mortgage fraud” is typically used to describe fraudulent practices by borrowers in order to secure loans they cannot afford to repay or to secure loans that exceed the value of the home or homes in question. Because they do not involve defrauding the government, these cases have nothing to do with the False Claims Act. However, fraudulent lending in cases where mortgages are guaranteed or insured by the government does constitute a violation of the False Claims Act.
Since the financial crisis of 2008, the Federal Housing Administration (FHA) and the Department of Housing and Urban Development (HUD) have become major players in the housing market. In fact, more than 40% of new mortgages today are backed by the FHA through loan guarantees and mortgage insurance. Lenders may also obtain mortgage insurance from the FHA to hedge against mortgage defaults.
If a lender knows that it can purchase mortgage insurance on a particular loan, it may be more inclined to lend money to an unqualified borrower. Taking out FHA mortgage insurance on a loan that the lender knows to be fraudulently obtained or likely to default may be a violation of the False Claims Act because it involves claiming federal funds based on fraudulent activity. Any other type of fraud or falsification related to obtaining or making a claim against FHA, mortgage insurance may also violate the False Claims Act.
Becoming a Whistleblower on Mortgage Fraud
If you have knowledge of fraudulent behavior related to FHA mortgage insurance or any other government-backed mortgage program, your knowledge may provide the basis for a qui tam lawsuit. Reporting mortgage fraud against FHA or HUD is a public service because it helps the government recover funds needed to help Americans legitimately secure affordable housing. That public service is rewarded under the False Claims Act, which allows whistleblowers in successful cases to receive a substantial percentage of the money recovered as a whistleblower reward.
Kenney & McCafferty is a team of dedicated qui tam attorneys who have been representing whistleblowers in high-profile and important qui tam cases for fifteen years. If you are interested in becoming a whistleblower to report mortgage fraud, Kenney & McCafferty has the experience to successfully execute your qui tam claim. In addition, we will work to ensure that you are afforded full whistleblower protection under the law because we understand that blowing the whistle on fraud can have serious implications for your career and personal life. For that reason, we also use our qui tam expertise to maximize our clients’ whistleblower compensation.
If you have knowledge of a fraud or false claim against the government, please contact our qui tam lawyers today. Kenney & McCafferty attorneys will consult with you about your case, without obligation. All communications with Kenney & McCafferty attorneys during these consultation services are confidential and protected by the attorney-client privilege.