United Shore Shoddy Underwriting, QC Practices Cost $48M in FHA Lending Violations Case

United Shore Shoddy Underwriting, QC Practices Cost $48M in FHA Lending Violations Case

Troy, Michigan-based United Shore Financial Services LLC (USFS) has agreed to pay the U.S. $48 million to resolve allegations it violated the False Claims Act by underwriting Federal Housing Administration (FHA)-insured mortgage loans that did not meet FHA requirements.

As part of the settlement agreement, United Shore admitted to pressuring underwriters to approve FHA mortgages, using a compensation plan formula tying underwriter compensation to percentage of loans approved and closed, and falsely certifying that direct endorsement underwriters reviewed appraisal reports before USFS approval and FHA-insured mortgage endorsement, the Justice Department announced Wednesday.

U.S. Investigation Finds USFS Approved Hundreds of Ineligible FHA-Insured Loans

Allegations stem from a January 10, 2014-initiated joint investigation into United Shore Financial Services’ underwriting and quality control practices by the U.S. Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the Civil Division’s Commercial Litigation Branch and the Western District of Wisconsin and Eastern District of Michigan U.S. Attorneys’ Offices....

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