Skip to main content

Guild Mortgage to Justice Department: See You in Court!

Phil Hall
May 20, 2016
In a relatively rare piece of pushback from a lender, Guild Mortgage Company is fighting back against charges from the U.S. Department of Justice (DOJ)

In a relatively rare piece of pushback from a lender, Guild Mortgage Company is fighting back against charges from the U.S. Department of Justice (DOJ) that the San Diego-based firm violated the False Claims Act by allegedly failing to properly originate and underwrite mortgages insured by the Federal Housing Administration (FHA).

In a press statement, President and CEO Mary Ann McGarry forcefully defended her company against the DOJ charges.

“The government's action is unwarranted and without merit,” she said. “The implication that any default on an FHA loan by a borrower represents wrongdoing by the lender is not justified. For more than five decades Guild has responsibly underwritten fixed rate and fully documented loans in accordance with FHA requirements.”

McCarry also questioned whether the DOJ was creating an “enforcement environment” the prevented lenders from properly serving their borrowers.

“It is unfortunate that lenders such as Guild have been placed in this untenable position where any minor error could result in substantial financial penalties,” she continued. “To help families with low and moderate incomes, we need to expand homebuying opportunities, not shrink them. Sadly, if this punitive environment continues, the cost of lending will continue to increase for FHA borrowers and only the wealthy will be able to buy homes.”

For its part, the DOJ was unapologetic about filing a complaint against Guild Mortgage in the U.S. District Court for the District of Columbia.

“This case is another example of the Justice Department’s continued efforts to ensure that lenders that participate in the FHA mortgage insurance program act in good faith and conduct appropriate due diligence when committing the United States to insure home loans,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “To protect the housing market and the FHA fund, we will continue to hold responsible lenders that knowingly violate the rules.”

May 20, 2016
Fannie Mae Updates Underwriting To Help 'Credit Invisible' Borrowers

Enhancement to Desktop Underwriter system intended to support loans when borrower has no credit score.

Regulation and Compliance
Dec 06, 2022
MBA Offers Suggestions For Improving Refis, Forbearance

Responds to CFPB's request for information published in September.

Regulation and Compliance
Nov 30, 2022
2023 Conforming Loan Limit Tops $1M For High-Cost Areas

FHFA said the baseline conforming loan limit will increase 12% next year.

Regulation and Compliance
Nov 29, 2022
FHA Extends Waivers To Its HECM Loss-Mitigation Policies 

Extension applies to senior borrowers affected by COVID-19.

Regulation and Compliance
Nov 28, 2022
N.J. Real Estate Developer, Lawyer Admit To Mortgage Fraud

Plead guilty to defrauding Fannie Mae, insurers of over $3.5 million.

Regulation and Compliance
Nov 28, 2022
Strength In Numbers

Seeking advice from the CFPB

Regulation and Compliance
Nov 21, 2022