Salt Lake City Residential Mortgage Lender Enters Into Settlement Agreement to Resolve Non-Compliance with Housing and Urban Development Regulations
Company agrees to pay over $1,000,000 during the next three years
DENVER – U.S. Attorney John Walsh today announced that the U.S. Attorney’s Office, working on behalf of the U.S. Department of Housing and Urban Development (HUD), entered into a settlement agreement with RANLife, Inc., a Salt Lake City, Utah corporation that originates and underwrites residential mortgage loans that are insured by HUD’s Federal Housing Administration (FHA). The settlement agreement resolves allegations that RANLife was not complying with HUD’s regulations regarding issuing residential loans.
FHA insurance protects lenders, such as RANLife, against losses due to defaults on the FHA-insured loans. If the borrower of an FHA-insured mortgage loan defaults, the holder of the mortgage can submit a claim to HUD for any loss from the default. In return, lenders are required to comply with HUD rules and regulations in originating and underwriting the FHA-insured mortgage loans to ensure the borrowers and mortgage loans are creditworthy of FHA insurance.
According to the settlement agreement, between January 1, 2007, and March 31, 2012, RANLife originate, underwrote and endorsed for FHA insurance a total of 96 loans, all of which went into default within the first two years of the loan, and ultimately resulted in FHA insurance claims paid by HUD. The United States contends for certain of these loans that RANLife failed to comply with HUD rules and regulations in originating, underwriting, and endorsing the loans for FHA insurance. The settlement agreement is neither an admission of liability by RANLife nor a concession by the United States that its claims are not well founded.
The agreement requires RANLife to pay the U.S. a total of $1,032,714.96 over the next three years to satisfy the terms of the settlement agreement.
“RANLife falsely claimed to be in compliance with HUD rules on mortgage loans so that HUD – and U.S. taxpayers – would insure RANlife from losses on those loans,” said U.S. Attorney John Walsh. “This sort of conduct contributed to the mortgage crisis of 2008 and hurt not only the housing market, but the entire economy. As a result of this misconduct, RANlife will pay the taxpayers over $1,000,000 to compensate for giving faulty loans that ultimately went into default.”
“The settlement announced today is the culmination of over three years of work by HUD OIG and our continued efforts to identify and properly respond to instances of fraud against HUD’s mortgage insurance program,” said Special Agent in Charge David R. Barnes, HUD OIG.
This matter was investigated by the U.S. Housing and Urban Development’s Office of the Inspector General. The settlement agreement was obtained by the work of Assistant U.S. Attorney Jamie Mendelson.