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The ""U.S. Department of Justice"":http://www.justice.gov has filed a civil lawsuit against Robert S. Luce, founder and president of MDR Mortgage Corp. a mortgage lending business located in Palatine, Illinois. The complaint centers around 90 Federal Housing Administration (FHA) loans that went into default.
According to the suit, Luce falsely represented to HUD and FHA officials that he was not under criminal investigation over a more than three-year span, from April 2005 to October 2008, when in fact he had been indicted on April[IMAGE] [COLUMN_BREAK]
5, 2005 for mail fraud, wire fraud, and obstruction of justice in an unrelated case.
Because of the indictment, Luce and MDR were not entitled to originate mortgage loans under FHA requirements, but federal official say MDR originated more than 90 FHA-insured loans during that timeframe that later defaulted.
According to the complaint, HUD was required to pay more than $1.6 million in insurance claims to holders of the defaulted mortgage notes, as well as costs and expenses on these loans.
Attorneys for the U.S. are seeking to recover losses from Luce's alleged violations of the False Claims Act, as well as civil penalties.
The Justice Department noted in a statement that MDR is no longer participating in the HUD insurance programs.
""The FHA is intended to help families achieve the dream of homeownership,"" said Tony West, assistant attorney general of the Justice Department's civil division. ""Mortgage lenders who lie in order to reap the benefits of these insurance programs, as is alleged here, undermine the integrity of these programs and misuse taxpayer funds that are meant to support single family housing.""
