Department of Justice Accused Celink Of Wrongfully Collecting Interest On FHA Insurance
Celink has settled a federal lawsuit alleging that it violated the False Claims Act servicing of reverse mortgage loans. The Michigan-based servicer agreed to fork out $4.25 million to resolve the matter. However, they did not admit liability nor did they accept responsibility for collecting the illegal fees.
The suit alleged that Celink received interest on insurance payments from FHA for loans that were ineligible for such payments.
The Department of Justice alleged the loans did not meet the requirements for interest payments. Federal lawyers allege they were not eligible for a number of reasons.
The loans did not meet deadlines for obtaining a property appraisal. They also failed to meet deadlines when commencing foreclosure proceedings. The mortgage servicer also failed to exercise reasonable diligence in completing the foreclosure.
The reverse mortgage servicer allegedly received interest payments from November 2011 to May 2016.
The lawsuit was resolved without the servicer admitting liability.
United States Attorney Chapa Lopez said in a statement:
In addition, Celink CEO Jason McNamara told HousingWire:
Wyatt Achord, acting special agent-in-charge at HUD-OIG also said the case should be a warning to reverse mortgage servicers:
This investigation and settlement should serve as a stark reminder of our ongoing efforts to ensure that our mortgage industry partners adhere to mutually agreed upon program rules and business practices which help mitigate financial risk associated with FHA programs.
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