Feds Sue Allied Home Mortgage Over Alleged Fraud

Law360, New York (November 1, 2011, 4:03 PM EDT) -- U.S. prosecutors sued Allied Home Mortgage Capital Corp., one of the largest mortgage brokers in the nation, on Tuesday for alleged lending fraud that left federal mortgage insurers to cover $834 million in defaulted loans.

Allied and its underwriting arm, Allied Home Mortgage Corp., allegedly violated a bevy of rules meant to make sure government-insured mortgages to nontraditional borrowers were provided prudently, U.S. Attorney for the Southern District of New York Preet Bharara said in a civil lawsuit.

The complaint, a government intervention in a whistleblower...
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