The whopping $298.5 million verdict in an FHA lawsuit against Americus Mortgage Corp. offers valuable lessons to mortgage shops and their executives to help them avoid potentially staggering liability under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act, according to a legal analysis. Apart from the chief executive officer’s individual liability, the case is noteworthy because the court sided with the government in two post-trial rulings on proximate causation and statistical sampling in large-scale fraud cases. The case, U.S. v. Americus Mortgage, et al., involved two mortgage companies formerly known as Allied Mortgage and their chief executive officer, Jim Hodge. Filed in the Southern District of Texas in 2011, the lawsuit alleged fraud against FHA over a 10-year period. The Department of Justice sought damages under the FCA and FIRREA for losses stemming from ...

The U.S. Department of Agriculture has issued guidance for conducting its mandated five-year review to identify areas that no longer qualify as rural for housing programs. For purposes of establishing eligibility to participate in USDA direct and indirect single-family housing guaranteed programs, “rural” and “rural area” are defined as “any open country, or any place, town, village or city which is not part or associated with an urban area.” To be designated as rural or rural area, the area must have a population not exceeding 2,500 inhabitants or a population of more than 2,500 up to 10,000, “if it is rural in character.” An area with more than 10,000 inhabitants up to 20,000 may be classified as rural if it is not within a standard metropolitan statistical area and “has a serious lack of credit for lower and middle-income families, as determined by the [USDA] secretary or the secretary of the ...

Maintenance Notice of HUD’s Lender Electronic Assessment Portal and Electronic Appraisal Delivery System. The Department of Housing and Urban Development has announced a systems check for its Lender Electronic Assessment Portal (LEAP) and Electronic Appraisal Delivery (EAD) system as part of routine maintenance. LEAP will be unavailable from 8 a.m. (Eastern), Nov. 10, 2017, through 8 a.m. (eastern), Nov. 12, 2017. During the period, lenders will be unable to submit recertification packages, change requests, notices of material events, or edit institutional data. Normal operations will resume at 8 a.m., Nov. 12. The EAD Integration and Production system is scheduled for regular maintenance and will be unavailable from 12 p.m., Nov. 11, 2017, through 9 p.m., Nov. 12. Operations will resume once systems check is complete. FHA Issues Policy Waiver for Major Disaster Areas in Puerto Rico. The ...

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