ROCHESTER, N.Y., Aug. 8, 2017 /PRNewswire/ -- The United States Department of Justice announced today that PHH Mortgage Corporation (PHH) has agreed to pay the United States over $74 million to settle claims that loans originated by PHH that were insured by the U.S. Department of Housing and Urban Development's (HUD) Federal Housing Administration (FHA) and the Department of Veteran Affairs (VA) and for loans sold by PHH to Fannie Mae and Freddie Mac failed to meet the required underwriting regulations.
Portions of the settlement resulted from a lawsuit filed under the qui tam whistleblower provisions of the False Claims Act by Mary Bozzelli, a former employee of PHH. Ms. Bozzelli worked for PHH from 1992 to 2011 as an underwriter and underwriting supervisor.
"It is great to see PHH finally held accountable for its actions," said Bozzelli, who filed the lawsuit in 2013. "Mortgage fraud is hardly victimless. Not only did PHH defraud taxpayers, but instead of helping deserving borrowers obtain home loans through the government loan programs, I witnessed firsthand the ways in which PHH abused the programs to line its own pockets."
Ms. Bozzelli is represented by Nelson Thomas, Michael Lingle, and Jonathan Ferris of Thomas & Solomon LLP in Rochester, New York. The firm also represented a whistleblower in a case against M&T Bank that resulted in a $64 million settlement last year for similar violations.
As part of the settlement agreements, the United States is awarding Ms. Bozzelli over $9 million for the role she played in blowing the whistle on PHH's mortgage fraud.
"Mary is a great example of someone who was willing to step forward and do the right thing," said her attorney, Nelson Thomas. "Today shows that there are indeed individuals can make a big impact on stopping corporate fraud. The reward that she is receiving is completely appropriate given that she has saved the taxpayers tens of millions of dollars."
Thomas said that PHH's settlement is one of several dozen settlements with mortgage lenders for similar conduct in the past several years. "Unfortunately, even almost a decade after the mortgage financial crisis, lenders are still trying to find ways to cheat the government," Thomas said, noting that even in 2013, a PHH executive characterized one of PHH's defect rates for FHA loans as 'shocking.' "We can only hope that there are more people like Mary that are willing to step forward to make sure these companies are held accountable."
Ms. Bozzelli and her attorneys also expressed their gratitude for the hard work of the United States Department of Justice and U.S. Attorney's Office for the Eastern District of New York and the District of Minnesota in prosecuting this action.
About Thomas & Solomon LLP
Thomas & Solomon LLP is an employment law firm in Rochester, New York regularly representing qui tam whistleblowers in False Claims Act litigation. To date, the firm has represented whistleblowers in actions leading to more than $100 million in recoveries for the United States. The firm also regularly represents employees in all types of employment litigation, including workplace retaliation actions.
Media Contact: Nelson Thomas, phone: 585-272-0540 [email protected]
SOURCE Thomas & Solomon LLP