Mortgage lender Guaranteed Rate has reached a $15.06 million settlement with the Justice Department over allegations it knowingly violated program requirements when it originated and underwrote mortgages insured by the Department of Housing and Urban Development’s Federal Housing Administration (FHA), or when guaranteed by the Department of Veterans Affairs.
The agreement resolves allegations brought by former Guaranteed Rate employee Anthonitte Carranza under the whistleblower provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims and to receive a share of any recovery.
The company issued a statement that says, in part: “Guaranteed Rate is committed to doing the right thing and serving the needs of our customers. We come from a good place. We always have. Mortgage lending is a complicated and highly regulated business, and government lending guidelines are especially complex. In this matter, the DOJ helped us identify some issues that had already been corrected or were immediately corrected once identified. At no time did any audit review highlight any of these issues previously. We never intentionally violated any guidelines, that’s just not who we are."
The statement continued, “At the same time, the statement from the DOJ feels dangerous to us. We have always operated with a customer-first approach, and a commitment to doing the right thing by adhering to all guidelines and regulations. We believe most of our peers in the industry do the same. Scenarios just like these have driven many lenders away from operating in this space, leaving the rest of us operating from a position of fear. This results in fewer options for customers, not more.”
According to the Chicago Tribune, the $15 million-plus civil settlement includes more than $2.4 million for Carranza, who worked as an underwriter for Guaranteed Rate from 2012 to 2013, and again from 2015 to 2016. In a lawsuit, Carranza alleged she was fired during her second tenure after raising concerns with Guaranteed Rate’s management that the company was “engaging in fraud and submitting false claims” to the government.
Read more about the Guaranteed Rate settlement.