Van Nuys, CA - Congressman Howard L. Berman today announced a $1 billion settlement to resolve claims by the U.S. Government against Bank of America for underwriting and origination of tens of thousands of government-insured loans to unqualified borrowers.  The settlement was included in yesterday’s landmark global resolution between the U.S. and major mortgage servicing banks, and is the largest ever False Claims Act settlement relating to mortgage fraud.
 
“When Senator Grassley and I partnered to amend the False Claims Act, this is exactly the kind of victory we were hoping to achieve for the American people,” said Congressman Berman.  “For those who are facing problems with their mortgages, I’m hopeful that the HUD settlement agreed to by the states will provide relief.  But in the False Claims Act settlement we’re talking about protecting every American taxpayer from fraud.  It not only requires Bank of America to repay taxpayers for Countrywide’s practice of defrauding the FHA insurance program, but it will also force banks to think twice before they try to stick taxpayers with the bill for their deceptive lending practices.”
 
In 1986, Congressman Berman was instrumental in securing House passage of the bipartisan False Claims Act Amendments, which have been responsible for the recovery of more than $30 billion in waste, fraud and abuse in the government. 
 
Since 2009, the United States Attorney’s office has been investigating Bank of America's lending practices to determine whether the bank, through Countrywide, which it acquired in 2008, knowingly made loans insured by the Federal Housing Administration (FHA) to unqualified home buyers. The investigation also encompassed allegations that the bank and Countrywide defrauded the FHA insurance fund by originating mortgage loans that were based upon inflated appraisals. During the investigation, the office determined that the bank's conduct provides a basis for affirmative civil enforcement under, among other legal remedies, the False Claims Act.
 
The False Claims Act Amendments, achieved through a partnership between Congressman Berman and Republican Senator Chuck Grassley, also served as a model for California’s law, which has recovered over $600 million to the state.
 
To read more about the $1 billion mortgage fraud settlement click here.
 
For more on Congressman Berman and the False Claims Act Amendments click here.
 
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