The whistleblower and fraud recovery lawyers at MahanyLaw are investigating claims that Freedom Mortgage of Mt. Laurel, New Jersey, failed to properly process residential mortgage loans backed by the U.S. Veterans Administration. Improper underwriting leads to higher than average default rates. That hurts both taxpayers and the vets taking out these loans.
According to the U.S. Veterans Administration, Freedom Mortgage wrote more VA loans last year than any other VA approved lender. In 2015, private lenders wrote 631,151 VA backed loans last year. 52,816 were written by Freedom Mortgage. Those loans were worth $11.1 billion.
Defaults by veterans in VA backed loans are actually quite low. Write tens of thousands of loans and there are bound to be some bad ones. From what our client tells us, the bad loans are not accidental. Earlier this year, Freedom settled similar charges with the Department of Justice regarding their underwriting practices of FHA loans.
In the earlier case, Freedom paid $113 million to settle charges that the company routinely violated FHA underwriting guidelines. Prosecutors said the company failed to comply with HUD origination, underwriting and quality control guidelines.
Despite paying $113 million in penalties, the company publicly refused to admit any wrongdoing. According to a statement released earlier this spring, a Freedom spokesperson said, “Without any admission of liability and in order to avoid the extended distractions and expenses associated with protracted litigation, Freedom Mortgage made a business decision to resolve this matter.”
Despite no public admission of wrongdoing, the Justice Department said that as part of the settlement, Freedom admitted to the following statement:
“The EPD QC [early payment default quality control] reviews that Freedom Mortgage did perform revealed high defect rates, exceeding 30 percent between 2008 and 2010. Yet, between 2006 and 2011, Freedom Mortgage did not report a single improperly originated loan to HUD, despite its obligation to do so. In 2012, after identifying hundreds of loans that “possibly should have been self-reported to HUD,” it reported only one. As a result of Freedom Mortgage’s conduct, HUD insured hundreds of loans that were not eligible for FHA mortgage insurance...”
Freedom Mortgage and VA Lending
We believe that Freedom committed similar violations with respect to its VA lending business. In fact, those violations may be ongoing.
To assist in our review and investigation, we wish to speak with any veterans who have obtained Freedom loans during the last 6 years. We also wish to speak with any “insiders” – that means loan reps, underwriters, quality control and compliance professionals and the like. Confidentiality is assured.
Our servicemen and women have sacrificed much simply we can enjoy our freedom and security. Our goal is to insure that we protect them from predatory underwriting practices. If you financed through Freedom or worked there, we would appreciate a few minutes of your time.
If you are a veteran with a Freedom Mortgage VA loan, please write to us at [hidden email]. Give us a convenient time to call you too. Want to speak with someone immediately? Contact attorney Tim Granitz at 800.669.7782 or attorney Anthony Dietz at (248) 789-5551. Are you a present or former Freedom “insider”? We certainly want to hear from you too!
The whistleblower lawyers at MahanyLaw help empower mortgage and banking professionals stop fraud and greed. We also defend our whistleblower clients from retaliation and have helped our clients win over $100 million in whistleblower awards in the last 5 years.
MahanyLaw – Protecting Veterans and Taxpayers – We Are America’s Whistleblower Lawyers
We are also investigating similar claims against Loan Depot (loanDepot). Click for more information.
UPDATE: On October 23rd we began a second investigation against Freedom Mortgage, this one involving an allegation that the company does not properly credit mortgage payments leading some homeowners to receive late fees and to be falsely reported to credit reporting agencies as having missed payments.