by Brian Mahany
Allied Home Mortgage Corporation or Allied Home Mortgage Capital Corporation? Is that like asking “theatre” or “theater”? Allied’s president and owner Jim Hodge says there is a difference.
Our firm, Mahany & Ertl, brought action against Allied on behalf of taxpayers back in May alleging massive mortgage fraud. That case remained under seal until last week when it was adopted by HUD and federal prosecutors. Allied turned around and sued the government the very next day for suspending their participation in the FHA loan program – wait until you hear their defense!
Jim Hodge, who with is wife owns 99% of Allied, filed a declaration (much like an affidavit) claiming that he has served as president of Allied Home Mortgage Corporation for the last 18 years. In perhaps the ultimate shell game, Hodge admits that Allied Home Mortgage Capital Corporation, his other company with an almost identical name, has been audited by HUD and has had “issues” that were “raised” by HUD auditors. Magically, however, those problems should be discounted because Allied Home Mortgage Corporation is a different company – a different company that admittedly purchased the assets of Allied Capital.
I am not sure where Hodge is heading with the shell game of names but the gist of his arguments is that Allied should be allowed to stay open because his “new”company that has been around for 18 years cleaned up its act several months ago. To us, that’s like a bank president convicted of embezzlement saying that because he changed his name he should be released from prison and given his old job back.
On Tuesday (November 8th) a federal judge will hear arguments on whether Allied and Hodge can remain open. Allied wants a judge to order that HUD rescind its emergency suspension of the company. Tuesday’s court hearing probably has no effect on how the massive $2.5 billion dollar fraud case against Allied is decided. The hearing does impact on whether American taxpayers must potentially foot the bill for even more losses on bad loans, however.
Although Allied has a long history of problems with state and federal regulators, it is entitled to its day in court. The immediate question is does it have a right to issue federally backed mortgages while it fights serious fraud charges. We say “no”!
Mahany & Ertl is a boutique law firm that concentrates on fraud cases and fraud recovery including federal whistleblower cases (called qui tam or false claims act cases.) If you know of a person or company that is ripping off federally insured lenders or federally backed loans, give us a call. The call is completely confidential. You may be entitled to substantial compensation for your information. For a confidential consultation, contact attorney Brian Mahany at (414) 704-6731 (direct) or by email at