A final civil action has been disclosed by the government in the False Claims Act settlement by the parent of United Wholesale Mortgage.
In December, a
$48 million settlement was reached between United Shore Financial Services LLC and the Department of Justice.
At issue were mortgages originated by the Troy, Michigan-based company that were insured by the Federal Housing Administration.
From January 2006 through December 2011, United Shore knowingly originated, underwrote and certified FHA-insured loans that didn’t meet FHA requirements, according to the Department of Justice.
Underwriters were improperly pressured to approve FHA mortgages. Underwriter compensation was tied to the share of loans approved and closed.
In addition, United Shore
falsely certified that direct endorsement underwriters personally reviewed appraisal reports prior to approving and endorsing them.
Furthermore, United Shore, which has been an FHA-approved direct endorsement lender since March 1988, failed to self report its findings of severe problems with FHA-insured loans to the Department of Housing and Urban Development.
HUD’s Office of Inspector General Wednesday disclosed a final civil action in the matter.
“United Shore entered into a settlement agreement with the Federal Government to pay $48 million to avoid the delay, uncertainty, inconvenience and expense of lengthy litigation of certain civil claims the government stated it had against United Shore,” the inspector general stated.
The notice indicated that HUD will receive $45 million of the settlement, while the other $3 million will be paid to other federal entities.
United Shore paid $10 million on Dec. 28, 2016. Another $13 million payment was due on Tuesday, while $5 million will be paid annually with the final payment expected by March 27, 2022.
“In accordance with HUD Handbook 2000.6, REV 4, the final action target date will be set at April 26, 2022 (30 days from the date on which final payment is expected),” the notice stated.
