by Brian Mahany
Our action against Allied Home Mortgage, which the court ordered unsealed last week after being adopted by HUD and the U.S. Attorney’s Office, is certainly the big news in the mortgage world. The feds now have billion dollar + claims against Allied and Deutsche Bank. Hopefully others will follow.
American taxpayers have been fleeced by shady mortgage lenders eager to write anyone a mortgage, even if they could obviously not afford the house they were purchasing. Now Maine joins the list of governments taking action against Allied.
On Friday, William Lund, Superintendent of Maine’s Bureau of Consumer Protection, ordered Allied to stop accepting new applications from Maine residents. The state even went one step further than the feds and ordered that Allied transfer pending applications to other mortgage lenders. Maine is taking any chances that taxpayers, or consumers, will lose more money.
Although the U.S. government through agencies like HUD (U.S. Department of Housing and Urban Development) backs many mortgages, consumers lose too when they are coerced into taking a loan that they can’t afford or don’t understand. This frequently happens with adjustable rate mortgages that may have very low payments for a few years but then skyrocket. If not properly explained, the homeowner could be suddenly faced with foreclosure and the loss of their home when the payments adjusts and the rate gets higher.
It is unknown whether Allied is suing or challenging Maine’s decision to shut down the company. Allied has sued the federal government, however, saying that they should be allowed to continue writing mortgages backed by the government while the case works it way through the courts. HUD claims that Allied’s default rate in some instances tops 50% meaning more than half the mortgage they write go into default. HUD says that Allied should not continue in business at the taxpayers expense while the litigation is pending. That hearing is scheduled for November 8th.
We understand the pain and worry our actions has caused for Allied’s workforce. Our goal, however, in bringing the lawsuit is to protect the taxpayers and stop fraud and waste. Halting new HUD backed mortgages and freezing bank accounts is the only thing that makes sense.
Mahany & Ertl welcomes referrals from others in the mortgage industry or those knowing of fraud against the taxpayers. We are committed to fighting fraud and joining with the government to protect taxpayers. Whistleblowers that come forward are often entitled to a percentage of what the government recovers. If you think you know of fraud being committed against the government, call us. We handle these so called qui tam or federal false claims act cases on a contingent fe basis and can help you stop fraud and perhaps secure a payment for your efforts.
Mahany & Ertl, LLC – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan & Portland, Maine. Legal services available in most jurisdictions.