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Allied Mortgage Capital

Home Loans Chester VA Allied Home Mortgage Capital Corp.

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Allied Home Mortgage ordered to pay $296 million for widespread FHA fraud

Last year, after a  long legal battle , the government secured a victory against Allied Home Mortgage and Hodge, when a federal jury unanimously found Allied Home Mortgage and Hodge liable for civil mortgage fraud and awarded the United States a total of $92,982,775 in damages, including $7,370,132 against Hodge.

But the case wasn’t done yet, and as it turns out, Allied Home Mortgage and Hodge will have to pay much more than first thought.

The U.S. Attorney’s Office for the Southern District of New York announced Tuesday that a federal judge in Texas more than tripled the jury’s award, pushing the total judgment against Allied to more than $296 million.

The judge also ordered Hodge to pay $25 million, up from his initial $7.37 million fine.

According to the U.S. Attorney’s Office, United States District Judge George C. Hanks Jr. of the Southern District of Texas, who presided over the trial, elected to increase the jury’s award under provisions of the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act.

Jury Awards $93 Million in Federal Fraud Case Against Allied Home Mortgage

A federal jury has ordered two Texas-based home mortgage companies and their chief executive to pay nearly $93 million for defrauding the government by issuing improper and risky home loans that later defaulted.

The companies, formerly known as Allied Home Mortgage Capital Corp. and Allied Home Mortgage Corp, and their founder, Jim C. Hodge, were the subject of July 2010 stories by ProPublica , which detailed a trail of alleged misconduct, lawsuits and government sanctions spanning at least 18 states and seven years. Borrowers said they’d been lied to by Allied employees, who in some cases had siphoned loan proceeds for personal gain. Some borrowers had lost their homes.

Despite the years of warnings, the federal government didn’t restrict Allied’s ability to issue mortgages until 2011, when prosecutors intervened in a pending whistleblower case and sued Hodge and both Allied companies in U.S. District Court in Manhattan. Simultaneously, the U.S. Department of Housing and Urban Development suspended Allied and Hodge from issuing loans backed by the Federal Housing Administration. Allied was also barred from issuing mortgage-backed securities through the Government National Mortgage Association (Ginnie Mae).

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