As reported in Reuters on September 4, 2015, Walter Investment Management Corp agreed to pay $29.63 million to resolve allegations that it submitted false claims related to a U.S. Department of Housing and Urban Development program that insures reverse mortgages. The settlement announced on Friday by the U.S. Department of Justice resolved claims that Walter violated the federal False Claims Act through its servicing of mortgages insured under HUD’s Home Equity Conversion Mortgages program.
The government alleged that Walter’s Reverse Mortgage Solutions Inc unit from August 2009 to March 2015 submitted fraudulent claims for interest payments to which it was not entitled. Walter’s submitted false claims to HUD for the reimbursement of unlawful referral fees by falsely representing them as lawful sales commissions, including through the use of straw companies to liquidate foreclosed properties.
The case is U.S. ex rel. McDonald et al v. Walter Investment Management Corp et al, U.S. District Court, Middle District of Florida, No. 13-01705.