by Brian Mahany
Since February, all the focus of mainstream media has been about how much of the $25 billion mortgage settlement will filter down to homeowners. For many the relief comes too late, although millions of homeowners remain underwater on their home mortgages. The story not being reported concerns the millions of dollars being paid to whistleblowers who are coming forward to authorities.
Our readers already know that we represent the whistleblower in the largest federal false claims action in the country – HUD’s $2.4 billion case against Allied Home Mortgage. We filed the Allied case on behalf of the government in April of 2011.
Whistleblowers can receive up to 30% of the money collected by the government. With mortgage fraud measuring in the billions, the amounts available for whistleblowers is staggering.
Who are these heroes? In the mortgage industry, the typical whistleblower is a branch manager, compliance specialist or underwriter. It is no secret that many of the mortgages written by banks and mortgage brokers in the late 90’s and early years of the new millennium were junk. When the market crashed, the fraud came to light.
As long as real estate prices were continuing to rise, bad loans and straw buyers could be kept hidden. Sell the property and everyone was paid and happy. No longer is that the case.
Many mortgages are guaranteed by HUD and other federally supported agencies such as Freddie Mac. When those mortgages fail, taxpayers are often directly or indirectly left footing the bill. The federal false claims act allows people with inside information to come forward and assist the government in recovering losses suffered by taxpayers. In return for information, claimants receive a portion of the money collected on behalf of the government.
The program is great but is generally limited to the first person coming forward with information. Wait too long and you lose the ability to get paid.
We think whistleblowers are the new American heroes. The largest mortgage fraud cases this century are mostly the result of whistleblowers. And the cases are not limited to lending practices. Medical providers, defense contractors and road builders have generated their fair share of fraud too.
If you have information about a fraud against the government, give us a call. We review cases large and small and never require you to advance any monies. For more information, contact attorney Brian Mahany at (414) 704-6731 (direct) or by email at . All inquiries are kept in strict confidence.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota. Services available in many jurisdictions.