Mortgage Boss Still On Hook For False Claims
Golden First Mortgage and its owner must face claims that their lies about regulatory compliance cost taxpayers $12 million, a federal judge ruled. The United States alleged in a 2013 complaint that Golden First and owner David Movtady “systematically violated their underwriting and quality control obligations” in loans endorsed by the Federal Housing Administration, “costing the United States millions of dollars on defaulted loans.” Golden First and Movtady tried to dismiss the lawsuit by arguing that the False Claims Act violation, as alleged, did not apply, was untimely and lacked specificity. U.S. District Judge Jesse Furman nevertheless upheld the False Claims Act claim on Monday.
More than 60 percent of Golden First loans have defaulted, and at least three-quarters of those defaults occurred in 2008. In that year, more than 30 percent of its mortgages defaulted within six months, the United States said. FHA operates the Direct Endorsement Lender mortgage-insurance program under the oversight, or lack of oversight, of the Department of Housing and Urban Development.
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