Utah Lenders Settle False Claims Act Charges

A pair of mortgage lenders based in Salt Lake City has settled federal charges of violating the False Claims Act.

Primary Residential Mortgage Inc. (PRMI) and SecurityNational Mortgage Company (SecurityNational), have agreed to pay the United States $5 million and $4.25 million, respectively, and to admit they certified loans for Federal Housing Administration mortgage insurance that did not meet federal underwriting requirements regarding borrower creditworthiness and eligibility. Although both companies are based in Salt Lake City, they did not operate in unison and their cases, while announced together, were resolved separately.

“The FHA program provides important economic support for homeownership and community development,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department has and will continue to ensure that program participants adhere to applicable requirements and will pursue those that knowingly misuse the program for their own gain and to the detriment of homeowners and the public.”

In announcing the settlements, the Justice Department added that the “claims asserted against SecurityNational and PRMI are allegations only and there has been no determination of liability.”