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HUD OIG: Past Year’s Investigations of Lenders Have Netted Significant Settlements

investigationThe Office of Inspector General for the U.S. Department of Housing and Urban Development (HUD OIG) announced that civil investigations of some of the Federal Housing Administration's (FHA) largest lenders have resulted in significant settlements in the last year.

The civil investigations were conducted to enforce the FHA origination rules against lenders that falsely certify insurability of loans under FHA's insurance program. Investigations of three of those lenders alone have totaled nearly $1 billion in money recouped, which has helped replenish FHA's insurance fund. Another $650 million has been awarded for the benefit of other government entities.

"These settlements are the latest step in a continuing effort to bring to light significant problems that we have identified in the loan underwriting practices of a number of large FHA-approved lenders, which have or will provide a meaningful financial boost to the FHA insurance fund," HUD OIG David A. Montoya said.

Every component of HUD OIG contributed to the investigations in the last year. Auditors served subpoenas for lender records, scrutinized lender underwriting practices, participated in the underwriting of thousands of loans, and reviewed many documents. As part of the investigations, OIG special agents interviewed many current and former employees of lenders as well as borrowers and many other individuals. The OIG's Legal Office provided important guidance and advice to those conducting the investigations and coordinated their efforts with the U.S. Department of Justice and HUD.

The staff in OIG's Fort Worth Regional Office, Chicago Regional Office, and Joint Civil Fraud Division led these investigations and reviews.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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