mhogan@imfpubs.com

Academy Mortgage, Draper, UT,  has settled allegations with the Department of Justice that over a nine-year period the nonbank used an underwriting process that led employees to disregard FHA rules and falsely certify residential loans. 

In sum, Academy settled the False Claims Act charges by agreeing to pay $38.5 million, but according to DOJ, there was "no determination of liability."

The case against the mortgage firm started when whistleblower Gwen Thrower, a former Academy underwriter, sued the firm in the Northern District of California, alleging the lender’s underwriting practices between January 2008 and April 2017 led FHA to pay insurance claims on loans that were improperly underwritten.

Thrower, as whistleblower plaintiff who brought the allegations to light, will receive roughly $11.5 million of the $38.5 million. 

FCA cases against lenders have been few and far between of late. Over the past two decades, federally insured depositories have exited the FHA arena after they were sued by the government for what they generally believed were innocent underwriting mistakes.