Lenders that exited the FHA program because of False Claims Act litigation include some of the nation’s largest banks. A Federal Reserve staff report shows that Wells Fargo, Bank of America and JPMorgan Chase originated 43% of FHA loans in 2010. That dropped to 5% in 2016. FHA mainly serves moderate-to-low-income borrowers and all three banks were subject to False Claims Act litigation by the Justice Department.
Due to indemnification risk under the False Claims Act, FHA servicing costs and bank capital rules, large banks are unlikely to re-enter the FHA program, which mainly serves moderate-to-low-income borrowers, according to the Fed report. President Trump’s nominee to be the new FHA commissioner, Brian Montgomery, said he hopes the DOJ will take a more reasonable approach toward False Claims Act enforcement and litigation. READ MORE >>>>>
Field service representatives that make mistakes will continue to be hammered by the Mortgage Order Mills.