The mortgage industry is inextricably tied to the federal government. Most lenders and major financial institutions that back these loans receive guarantees or insurance from federal agencies such as the Federal Housing Administration (FHA) or the Department of Housing and Urban Development (HUD).
Because of this connection, these lenders must follow federal laws and regulations. These laws can include rules concerning underwriting, properly representing the quality of loans, and correctly reporting a borrower’s income. Since there is significant profit in bending these laws, abuses are common.
The federal government often depends on whistleblowers to come forward with new information concerning mortgage fraud. If you think that you have witnessed these activities, a Columbia mortgage fraud whistleblower lawyer may be able to help. They can stand by your side to further develop your complaint and to seek out rewards for your information.
Mortgage lenders and banks that back many home loans are subject to the regulatory rules of federal agencies. This is because these lenders offer mortgages that enjoy backing by the federal government through HUD or the FHA. As such, the rules that control the income levels of borrowers, a borrower’s employment history, or the value of the property in the loan must meet the federal criteria.
Providing false data concerning these areas is a violation of federal law. Specifically, the False Claims Act, 31 United States Code § 3729, says that it is illegal for any party to knowingly provide false information to the federal government for the purposes of obtaining a payment. Because mortgage lenders often enjoy financial benefits through the above-mentioned mortgage insurance programs, providing this false data is often a violation of the False Claims Act.
A Columbia mortgage fraud whistleblower attorney could help people who believe that they have witnessed a violation of the False Claims Act. This includes demanding a reward for their information through a writ of Qui Tam that could result in a reward of somewhere between 15 and 25 percent of the recovered value in the case.
The companies that offer home loans through mortgages are not the only entities that may commit mortgage fraud. Home loans are tradable on the open market, and they often move through the hands of multiple parties while they are still in effect. Due to this, the movement is subject to a collection of financial laws.
One example of these laws is the Dodd-Frank Act. This Act concerns the securities market and the proper disclosure of transactions within it. Much like under the False Claims Act, the Securities and Exchange Commission often relies on whistleblowers to report apparent violations of the law. Individuals who think that they have witnessed a violation of the Dodd-Frank Act as it applies to mortgages can demand a reward for their information. A Columbia mortgage fraud whistleblower lawyer could take the lead in preparing these reports.
The mortgage industry offers lenders and securities traders multiple opportunities to break the law to increase their profits. Mortgage lenders may overstate a borrower’s income or overestimate the value of property when creating a loan document. In addition, securities traders may violate the rules concerning transparency when moving home loans as an asset.
If you believe that you are a witness to these violations of the law, you have the right to come forward as a whistleblower. This can result in the government punishing violators of the law as well as your receipt of a substantial reward for your information. Reach out to a Columbia mortgage fraud whistleblower lawyer today to schedule your consultation.