Tag Archives: Settlements

Freedom Mortgage Corp., is the latest company to resolve claims that it violated the False Claims Act by knowingly originating and underwriting single-family mortgage loans insured by the FHA that did not meet the mortgage insurer's requirements.

It's the fourth-largest RMBS settlement reached between the government and one financial institution.

The settlement stems from Wells Fargo’s participation in the Direct Endorsement Lender program, a federal program administered by the Federal Housing Administration. It is the largest recovery for loan origination violations in FHA history.

Federal and state regulators are still probing the bank even after Wells Fargo agreed to a $1.2 billion settlement earlier this month over underwriting practices on FHA-insured loans.

Despite a memo issued by the Justice Department in September promising to seek prosecution of individuals for their role in the financial crisis, it has not happened in the last five months even after the announcement of three notable settlements with large financial firms.

Regulators accused the bank of engaging in "reckless" underwriting practices on mortgage loans insured by the FHA.

The FDIC claims the investment banking firm sold toxic residential mortgage-backed securities to three failed banks.

The bank has until 2018 to pay the remaining $1.8 billion in consumer relief under the terms of the settlement.

Lehman originally accused JPMorgan Chase of improperly draining billions of dollars before the investment banking firm's infamous 2008 bankruptcy.

It is now more than seven years since the housing crisis hit, and settlements over claims of selling toxic residential mortgage-backed securities are still alive and well. Who is the latest to settle?