United States Files False Claims Act Suit Against California Mortgage Lender

admin —  June 10, 2009 — 1 Comment

Capmark Finance Inc., a California mortgage lender, has been charged for violating the False Claims Act by making false statements on applications for federal mortgage insurance covering residential nursing homes. The lawsuit, filed in United States District Court in Los Angeles, relates to a federal program under which the U.S. Department of Housing and Urban Development (HUD) guarantees mortgage loans used to acquire healthcare facilities such as hospitals and nursing homes.

The United States alleges that Capmark made false statements in HUD applications to guarantee mortgage loans made to acquire the Canoga Care Center, a residential nursing home facility in Canoga Park, California, and the Hudson Valley Care Center, located in Ghent, New York. After accepting Capmark’s applications for mortgage insurance, HUD was forced to pay $25,895,701.21 when both the Canoga Care Center and Hudson Valley Care Center defaulted on their loans. Pursuant to the False Claims Act, the United States is seeking treble damages and penalties.

Mortgage fraud is a top priority for this Administration, especially when public dollars are at stake,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division. “This complaint sends a clear message that we will aggressively pursue allegations of fraud on federal mortgage insurance programs, which are so vitally important to this economy.

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One response to United States Files False Claims Act Suit Against California Mortgage Lender

  1. Recently Capmark increased my total monthly escrow requiremnents from 10 months (Taxes) and 8 months (insurance) to 11 and 9. This little “deceptive business practice” increases my escrow requirements by $8,000 p/y. Basically, instead of refunding these excess funds to me, they can now, through internal maneuvering, keep my excess funds. How convenient that just prior to filing bankruptcy the requirements change. It may not seem like much, but if they did this to 500 hundred customers, they would have an extra $4 million in their account. Can anything be done??

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