We conducted a review to determine whether IndyMac Bank followed Federal Housing Administration (FHA) policies and procedures when it originated FHA-insured loans. We focused on loans secured by California properties and that were in claim or default status as of February 12, 2009. Within this group, we identified a set of questionable loans originated by IndyMac that had been generated by Beechwood Incorporated. Beechwood is a company located in Moreno Valley, CA, that conducts various real estate services.

Based on our review, the U.S. Attorney’s Office of the Central District of California filed a civil complaint against Beechwood and four individuals associated with the company. The U.S. Attorney’s Office filed the complaint under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, 12 U.S.C. (United States Code) 1833a, alleging that Beechwood and the individuals made false statements in support of a loan application and devised a scheme to defraud a financial institution.

On June 1, 2011, Beechwood entered into a settlement agreement to pay $100,000 to the U.S. Government to resolve the complaint. The parties agreed that the settlement agreement was not an admission of liability or fault on the part of either party and was entered into for the purpose of compromising disputed claims arising under or related to the complaint and to avoid the expenses and risks of litigation.