In my travels this morning I came across this article about the (not so surprising) lawsuit by the federal government against Allied Home Mortgage. (All loans apparently insured by HUD.)
In sum, according to the lawsuit about 32% of the 112,324 homes originated by Allied in 2010 defaulted -- resulting in more than $834 million in insurance claims by HUD. The allegations also include that more than 55 percent of Allied's loans in 2006 & 2007 were in default, with HUD apparently paying $170 million to settle those claims -- but that's also about when they discovered an additional $363 million in claims may be on the horizon due to an additional 2,509 of Allied's loans being in default.
This is apparently aÂ decade-long fraudulent lending practices lawsuit. The allegations are many, including violating rules meant to protect HUD's insurance fund and deceiving the agency by originating loans for years out of hundreds of "shadow branches" not approved by HUD. (Allegedly, Allied had about 600 branches, closing those (perhaps that did not meet up to their "sub" standards) that did not make a profit. Also there was an alleged statement by Allied in which they claimed to have met federal requirements, alleging that "someone else" in their organization signed the certifications ...which are apparently now found to be false. It makes one wonder at what times do people pass the buck...Â
For the full article, visit:Â