Lender To Pay Over $1M To Resolve Mortgage Fraud Allegations
Summary
American Financial Network Inc. (AFN), a mortgage lender based in Brea, Calif., has agreed to pay $1,037,145 to resolve allegations that it improperly and fraudulently originated government-backed mortgage loans insured by the Federal Housing Administration (FHA). This case began in March 2019, when a whistleblower — a former loan processor with AFN — filed a qui tam complaint under seal in federal court in Spokane. When a whistleblower, or “relator,” files a qui tam complaint, according to the Justice Department, the False Claims Act requires an investigation of the allegations. “FHA-backed mortgages are a critical resource for first-time homebuyers, moderate-income borrowers, and families who have suffered negative credit due to the pandemic or other events out of their control,” said Vanessa R. Waldref, the U.S. Attorney for the Eastern District of Washington. “By improperly originating ineligible mortgages, lenders take advantage of the limited resources of the FHA program and unfairly pass the risk of loss onto the public.”