Categorized | Commercial

United States Government Sues Allied Home Mortgage

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The mortgage lending practices of one of the biggest brokers in the United States have been called into serious question by the United States government. The government has sued Allied Home Mortgage, claiming that the lender has committed unprecedented levels of fraud to the tune of hundreds of millions of dollars.

The government also claims that Allied Home Mortgage’s fraudulent practices have caused thousands of homeowners to lose their home, contributing to the overall decline in the residential real estate market around the nation. The practices under scrutiny involve the company’s origination of loans that were insured by the Department of Housing and Urban Development.

Attorneys acting on behalf of the United States government have also not ruled out the possibility of criminal charges being filed against top executives from the mortgage company.

Allied Home Mortgage is being accused of filing fraudulent loans during the housing boom, of which nearly a third ended up in default. As such, the Department of Housing and Urban Development has had to pay nearly one billion dollars in insurance claims.

The lawsuit against Allied Home Mortgage not only refers to the deceptive lending practices of the company, but also their inability to ensure quality control in their offices throughout the nation. The lawsuit claims that the company failed to act responsibly at a corporate level to avoid the issuance of fraudulent loans.

The struggles faced by Allied’s customers were apparent even during the housing boom. During the peak years of 2006 and 2007, Allied Home Mortgage had a default rate of nearly fifty-five percent.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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