November 1, 2011 / 4:34 PM / 7 years ago

U.S. sues Allied Home Mortgage for lending fraud

(Reuters) - The U.S. Department of Justice sued Allied Home Mortgage Capital Corp and two top executives over fraudulent lending practices that have cost the government more than $834 million of insurance claims.

In a complaint filed Tuesday, the Justice Department said Allied profited for years as one of the nation’s largest Federal Housing Administration lenders by “engaging in reckless mortgage lending, flouting the requirements of the FHA mortgage insurance program, and repeatedly lying about its compliance.”

Other defendants in the lawsuit are Allied Chief Executive Jim Hodge, and Executive Vice President Jeanne Steel. The lawsuit seeks triple damages under the federal False Claims Act as well as civil penalties and other remedies.

Reached at his Houston office, Hodge said “they’re so absurd” when asked about the alleged fraudulent lending practices and insurance claims. He had no immediate additional comment. A spokesman for the company had no immediate comment.

The government filed the lawsuit with the U.S. District Court in Manhattan, six months after accusing Deutsche Bank AG (DBKGn.DE) in a $1 billion fraud lawsuit of misleading it into insuring risky mortgages. Deutsche Bank has sought to dismiss that lawsuit.

Reporting by Jonathan Stempel in New York. Editing by Robert MacMillan

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below