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DOJ Sues; Says Allied Home Mortgage’s Lending Cost U.S. $834 Million
Posted By David Stout On November 1, 2011 @ 1:14 pm In News | Comments Disabled
The Department of Justice sued Allied Home Mortgage Capital Corp. and two top executives on Tuesday, accusing them of fraudulent lending practices that have cost the government more than $834 million of insurance claims, Reuters reported .
In a complaint filed in the Southern District of New York, the DOJ 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,” Reuters said.
Other defendants are Allied Chief Executive Jim Hodge and Executive Vice President Jeanne Steel, Reuters said. The suit seeks triple damages under the False Claims Act, as well as civil penalties and other remedies.
Hodge said the accusations are “so absurd,” Reuters said. A spokesman for the company had no immediate comment.
Despite Hodge’s disdain for the latest action against him and his company, Allied has a history of actions against it in many states, as the nonprofit news organization ProPublica has reported .
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