Mortgage Company to Pay $74 Million to Settle Fraud Charges

Mortgage Company to Pay $74 Million to Settle Fraud Charges

PHH Mortgage Corporation (PHH) has agreed to settle a whistleblower-initiated False Claims Act case for over $74 million.  PHH was the originator of loans insured by HUD’s Federal Housing Administration (FHA) and the U.S. Department of Veteran Affairs (VA) which failed to meet basic underwriting requirements.  The FCA case was initiated by Mary Bozzelli, who worked for PHH from 1992 to 2011 as an underwriter and underwriting supervisor.

As part of the settlement agreements, the United States is awarding Ms. Bozzelli over $9 million, a portion of which will go to compensate her legal team, and a portion of which will go to the IRS.