Mortgage Company to Pay $38.5 Million to Resolve Allegations of Violating False Claims Act

Mortgage company Academy Mortgage Corporation (Academy), based in Draper, Utah, has agreed to pay $38.5 million to resolve allegations it violated the False Claims Act by improperly originating and underwriting mortgages insured by the Federal Housing Administration (FHA).

The settlement announced today resolves a lawsuit filed and litigated by former Academy underwriter Gwen Thrower (Thrower) against Academy under the qui tam or whistleblower provisions of the False Claims Act, which permit a private party (known as a relator) to file a lawsuit on behalf of the United States and receive a portion of any recovery.

In her lawsuit filed in the Northern District of California, Thrower alleged that from January 2008 through April 2017, Academy had an underwriting process that led employees to disregard FHA rules and falsely certify compliance with underwriting requirements. Thrower further alleged that, as a result of Academy’s knowingly deficient mortgage underwriting practices, the government paid insurance claims on loans improperly underwritten by Academy.

Read the source article at justice.gov