Mortgage Fraud

Recently there has been a surge of whistleblower cases involving mortgage fraud. And for good reason. It turns out that during the run up to our current recession, banks and other financial institutions were providing home loans to people who really should not have been receiving them. They did this by failing to investigate and/or by disguising the borrowers’ poor creditworthiness. This form of mortgage fraud resulted in an unusually large number of loan defaults. What makes this conduct suitable for whistleblower lawsuits is that often a government program is liable for some or all of the defaulted amounts, usually because the government has provided a loan repayment guarantee to investors who purchased pooled loans in the securities markets. Frequently, insiders who worked for the originating banks or other participants in the lending or securitizing process know about this type of mortgage fraud. They are able to bring lawsuits against the institutions that engaged in lending misconduct under the federal False Claims Act and, in some cases, other banking laws. Mortgage fraud is just one area of lending fraud for whistleblowers. Other areas, would include Small Business Loan (SBA) fraud and farm loan fraud.

Qui Tam Contact


Mortgage Fraud



Show Comments