MetLife Inc. is paying more than $123.5 million to resolve false claims allegations on government-insured loans, originated residential loans through subsidiaryMetLife Bank, N.A., and MetLife Home Loans LLC, which it acquired from First Horizon National Corp. in 2008. Payment of the $123.5 million to resolve allegations that the bank violated the False Claims Act, according to an announcement from the U.S. Attorneys Office for the District of Colorado.
The settlement follows a two-year investigation by HUD’s Office of Inspector General.
The Justice Department claims that MetLife Bank, a direct endorsement FHA lender, knowingly originated loans insured by the Federal Housing Administrationeven though they didn’t meet FHA guidelines.The violations allegedly took place from September 2008 until March 2012.
According to the government, although the company’s quality control findings indicated a substantial share of its FHA originations weren’t eligible for the program, it repeatedly certified the loans for FHA insurance.
While FHA loans deemed by MetLife as having a “material/significant” deficiency was between 25 percent and 60 percent up until August 2010, the company began in 2010 frequently downgrading the deficiency level from “significant” to “moderate.”
“In one instance, a quality control employee wrote in an email discussing MetLife Bank’s practice of downgrading its quality control findings: ‘Why say Significant when it feels so Good to say MODERATE,'” the announcement stated.
Jeffrey Newman represents whistleblowers. He does not represent whistleblowers in this case.