Walter Investment Management Corp. Pays More Than $29 Million to Settle False Claims Act Allegations
Walter Investment Management Corp. (WIMC) is an expanded mortgage banking firm with primary concentration on the servicing and installation of residential loans. WIMC has agreed to pay $29.63 million to resolve allegations that, through its affiliate companies—Reverse Mortgage Solution Inc., REO Management Solutions LLC and RMS Asset Management Solutions LLC—it violated the False Claims Act in relation to their involvement in the Department of Housing and Urban Development’s Home Equity Conversion Mortgages program, which insures “reverse” mortgage loans. WIMC, through its affiliates, provides various services in the residential mortgage industry, including reverse or forward mortgages on behalf of major financial establishments. Reverse mortgage loans enable elderly homeowners to access their home equity.
The government alleged that, between August 2009 and March 2015, Reverse Mortgage Solution Inc., (with the knowledge and support of its corporate parent, WIMC) submitted untruthful claims for debenture interest from HUD by failing to appropriately reveal that it had not met certain deadlines thus was not entitled to such interest payments. The government also alleged that from July 1010 to October 2014, WIMC, through its subsidiaries, submitted false claims to HUD for the reimbursement of unlawful referral fees by falsely representing them to be lawful sales commissions. It should be noted that the claims resolved by this settlement are allegations only, and there has been no determination of liability.
According to U.S. Attorney A. Lee Bentley III of the Middle District of Florida, “This settlement represents a significant milestone in our office’s long standing campaign against mortgage fraud.” She went on to say, “HUD’s lending programs are vital to the economic well-being of some of our district’s most vulnerable residents and we are committed to holding the servicers and lenders to high standards.”
This settlement resolves allegations filed in a lawsuit by qui tam whistleblower and former executive of RMS, Mathew McDonald. The False Claims Act permits private individuals to sue on behalf of the government; it also permits the government to intervene in such lawsuits, as it did in this case. Mr. McDonald will receive $5.15 million in whistleblower rewards. Thanks to qui tam lawsuits such as these the government has the chance to prove their commitment to holding the services and lenders to high standards, and they have