A former mortgagee for the Federal Housing Administration has agreed to settle a lawsuit alleging false claims made on FHA-insured loans.
Golden First Mortgage Corp. was approved by the Department of Housing and Urban Development as an FHA direct endorsement lender from 1989 until 2010.
As a participant in the direct endorsement lender program, the Great Neck, N.Y.-based firm was required to maintain a compliant quality control program.
But a federal lawsuit filed by the government in April 2013 alleges that
no such quality control program was maintained by Golden First, even though it certified annually that it did.
The annual certifications were signed by the company’s owner, David Movtady.
The government claims that Golden First regularly approved loans that the company and Movtady knew never should have been
approved.
More than a thousand loans were certified by the company.
The false certifications violated the False Claims Act.
The U.S. Attorney for the Southern District of New York said Wednesday that Golden First and Movtady have agreed to a settlement, and U.S. District Judge Jesse Furman has approved the settlement.
The agreement calls for
$36 million judgment against Golden First and requires Movtady to pay $0.3 million.
In addition, Movtady
is permanently barred from conducting any business with the federal government.
