A subsidiary of one of the nation’s largest homebuilders is under federal scrutiny for its handling of FHA loans
The mortgage subsidiary of one of the nation’s largest homebuilders is under investigation by the Department of Justice for its handling of Federal Housing Administration Loans.
Lennar disclosed the investigation last week in a filing with the Securities and Exchange Commission, according to a USA Today report. Lennar said in the filing that federal authorities have subpoenaed records “regarding the inadequacy of certain underwriting and quality control processes related to Federal Housing Administration loans originated and sold in prior years.”
The FHA investigation centers around Eagle Home Mortgage, Lennar’s home-loan subsidiary. Lennar said it had given investigators information about Eagle Home Mortgage’s loans and processes, USA Today reported.
“The DOJ has to date not asserted any claims for damages or penalties,” Lennar said in its filing. “We do not believe that the ultimate resolution of these claims or lawsuits will have a material adverse effect on our business or financial position. However, the financial effect of litigation concerning purchases and sales of property may depend upon the value of the subject property, which may have changed from the time the agreement for purchase or sale was entered into.”
Federal authorities have gone after numerous mortgage lenders for underwriting loans that didn’t meet FHA standards. Wells Fargo, IBERIABANK Mortgage and United Shore have all paid fines to settle FHA claims in the last year. The Department of Justice is also suing Quicken Loans for claims related to its underwriting of FHA Loans, but Quicken Loans CEO Dan Gilbert has vowed not to settle, calling the investigation “a hold-up,” according to USA Today.
Related stories:
IBERIABANK companies to pay $11.7 million to settle mortgage probe
United Shore to pay $48 million to settle federal probe
Lennar disclosed the investigation last week in a filing with the Securities and Exchange Commission, according to a USA Today report. Lennar said in the filing that federal authorities have subpoenaed records “regarding the inadequacy of certain underwriting and quality control processes related to Federal Housing Administration loans originated and sold in prior years.”
The FHA investigation centers around Eagle Home Mortgage, Lennar’s home-loan subsidiary. Lennar said it had given investigators information about Eagle Home Mortgage’s loans and processes, USA Today reported.
“The DOJ has to date not asserted any claims for damages or penalties,” Lennar said in its filing. “We do not believe that the ultimate resolution of these claims or lawsuits will have a material adverse effect on our business or financial position. However, the financial effect of litigation concerning purchases and sales of property may depend upon the value of the subject property, which may have changed from the time the agreement for purchase or sale was entered into.”
Federal authorities have gone after numerous mortgage lenders for underwriting loans that didn’t meet FHA standards. Wells Fargo, IBERIABANK Mortgage and United Shore have all paid fines to settle FHA claims in the last year. The Department of Justice is also suing Quicken Loans for claims related to its underwriting of FHA Loans, but Quicken Loans CEO Dan Gilbert has vowed not to settle, calling the investigation “a hold-up,” according to USA Today.
Related stories:
IBERIABANK companies to pay $11.7 million to settle mortgage probe
United Shore to pay $48 million to settle federal probe
