U.S. Sues Allied Home Mortgage for Lending Fraud

[Hissyspit]

Source: Reuters

Tue Nov 1, 2011 12:32pm EDT

(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.

Read more: http://www.reuters.com/article/2011/11/01/us-alliedhomemortgage-fraud-lawsuit-idUSTRE7A04ST20111101

[russspeakeasy]

1. cost taxpayers $800 million....someone's getting a time out for this.

[Dont call me Shirley]

2. Where are the lawfuits against AIG, GS, BoA, Citi, etc

[Scruffy1]

3. Lawsuits?

I keep waiting to see the news: Bankers Arrested.

[DeSwiss]

4. I did a search of the article.....

...and didn't find the word "criminal" anywhere.

- What. A. Surprise.

K&R

[meow2u3]

6. It's easier to win a civil suit than a criminal trial

In this financial climate, where the banks and other fat cats have more money than the government, it's easier to pursue civil fraud. The burden of proof is preponderence of evidence for a civil case and proof beyond a reasonable doubt in criminal cases, the civil charges are more likely to stick than the criminal charges.

Those banks have so much money that they can hire powerful lawyers capable of easily razzle-dazzling juries that they'd con them into acquitting them. The government must be hedging their bets on a jury awarding them a much larger sum of money from a judgment than a criminal fine.

[DeSwiss]

7. Not talking about easy; I'm talking about justice. About what is right. n/t

[meow2u3]

9. Justice is a bit more difficult in this day and age

So is doing what's right. I'd like to see an exception made to the bill of attainder, ex post facto, and due process clauses when it pertains to criminal corporations, but unfortunately, pressing criminal charges against these criminals is an uphill battle.

Get them on civil charges first, then go after them on criminal charges if there's far more than enough evidence to prosecute and convict them.

[JDPriestly]

5. Finally, it begins.

It is at this level that one type of fraud associated with the mortgage crisis took place. They should go after all the management of these companies, at least all those who reviewed the loans, passed on them and took the profits.

What happened was shameful.

[sarcasmo]

8. Bankers don't get arrested they receive lawsuits.