52.3 F
Park Forest
Friday, May 27, 2022

U.S. Sues Illinois Mortgage Lending Business President & Founder in Connection with HUD Insured Loans

WASHINGTON—(ENEWSPF)—July 29, 2011. The United States has filed a civil lawsuit against Robert S. Luce, founder and president of MDR Mortgage Corp., a mortgage lending business located in Palatine, Ill., the Justice Department announced today.   MDR participated in mortgage insurance programs administered by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA).   The United States’ complaint seeks recovery under the False Claims Act and civil penalties under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).

According to the complaint filed today in the U.S. District Court for the Northern District of Illinois, Luce was indicted on April 7, 2005, for mail fraud, wire fraud, obstruction of justice and making false statements.   Between April 2005 and October 2008, Luce represented to HUD, and caused MDR employees to represent to HUD, that he was not under criminal investigation or indictment.   These statements were false at the time they were made, and Luce knew they were false at the time he or other MDR employees made them.   Because Luce was under indictment, MDR was not entitled to originate mortgage loans under FHA requirements.   Yet, MDR originated more than 90 FHA-insured loans that later defaulted.  

HUD was required to pay more than $1.6 million in insurance claims to holders of the defaulted mortgage notes, as well as costs and expenses on these loans.   MDR is no longer participating in the HUD insurance programs.

“The FHA is intended to help families achieve the dream of home ownership,” said Tony West, Assistant Attorney General of the Justice Department’s Civil Division. “Mortgage lenders who lie in order to reap the benefits of these insurance programs, as is alleged here, undermine the integrity of these programs and misuse taxpayer funds that are meant to support single family housing.”

In the interest of fostering home ownership by low and moderate income households, HUD, through the FHA, insures lenders against losses on mortgage loans made to buyers of single family housing.   Through its single-family mortgage insurance program, HUD lowers the cost of mortgage loans for qualifying families and guarantees the repayment of insured loans that go into default, thereby protecting the lender against loan default and minimizing the risk of loss on mortgages that meet certain requirements.   Approved HUD-FHA lenders, such as MDR, have the authority to originate FHA-insured mortgage loans, which then are often resold to another lender.   If the homeowner defaults on the loan and the lender forecloses, the lender may submit a claim under which HUD will pay the balance of the loan, related interest and other costs, and assume ownership and possession of the property.

The investigation leading to the filing of this complaint has been conducted by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Illinois, HUD and HUD’s Office of Inspector General, all of whom are part of the Financial Fraud Enforcement Task Force.   President Obama established the interagency task force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.   The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.   The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

Source: justice.gov

Recent Articles

Stay Connected


- Local Advertisements -


Most Popular Articles

Park Forest
clear sky
52.3 ° F
55.7 °
48.9 °
93 %
0 %
75 °
81 °
86 °
88 °
83 °

About Google Ads

The Google-supplied ads that appear on this website are not reviewed ahead of time and differ for each visitor. If anything offensive, inappropriate, or otherwise unwholesome appears, please notify us so we can take steps to block that specific advertiser. Email the URL or advertiser name to [email protected].