Bank To Pay $83M For Getting FHA Insurance On Bad Loans
Law360, New York (September 29, 2016, 6:42 PM EDT) -- A major North Carolina-based bank will pay $83 million to resolve allegations it violated the False Claims Act by obtaining Federal Housing Authority insurance on risky ineligible mortgages, the U.S. Department of Justice said Thursday.
Branch Banking & Trust Co., headquartered in Winston-Salem, is a direct endorsement lender in the FHA’s insurance program. From 2006 to 2014, it certified mortgage loans for FHA insurance that didn’t meet federal underwriting or quality control requirements, the government said. When the loans defaulted, the U.S. Department of Housing and Urban Development, which wouldn’t have insured the mortgages through FHA if it had known of...
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