Wednesday, November 02, 2011

US files $834 million lawsuit against Allied Home Mortgage

Federal officials filed a lawsuit Tuesday against Allied Home Mortgage Capital and two of its senior officials, seeking to recover $834 million in damages stemming from allegedly fraudulent mortgage insurance claims.

Allied President and CEO Jim Hodge and Executive Vice President Jeanne Stell were named as defendants, along with the company as a whole. The lawsuit was filed under the False Claims Act.

The complaint, filed by the U.S. Attorney for the Southern District of New York, said Allied originated mortgages out of "shadow branches" the company never disclosed to the Department of Housing and Urban Development, among other allegations of violating HUD requirements.

From 2001 to 2010, Allied originated 112,324 HUD-sponsored loans, 35,801 of which have since defaulted including 6,404 in the first six months of the loan. Allied is no longer a HUD-approved lender.

Allied Lawsuit

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