The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General (OIG), in coordination with the U.S. Attorney’s Office for the Eastern District of Michigan, conducted a review of GTL Investments, Inc., doing business as John Adams Mortgage Company regarding its originations, underwriting, quality control, and endorsement of Federal Housing Administration (FHA) loans.
The U.S. Government contended that it had certain civil claims against GTL Investments due to the origination, underwriting, quality control, and endorsement of 29 FHA-insured loans made from January 2008 through April 2012 that went to claim. Further, GTL Investments’ material deficiencies in the underwriting of the 29 loans resulted in losses to the FHA insurance fund. The Government also contended that it had actual and potential administrative claims against GTL Investments for two additional FHA-insured loans that remained in GTL Investments’ loan portfolio.
To avoid the delay, uncertainty, inconvenience, and expense of lengthy ligation in regard to the Government’s claim and in consideration of mutual promises and obligations, on December 23, 2014, GTL Investments entered into a settlement agreement to pay $4.2 million to the FHA insurance fund. GTL Investments also agreed to refrain from making any claim for FHA insurance benefits or indemnify FHA for losses incurred, if any, on the two loans that remained in its loan portfolio. The settlement agreement was neither an admission of liability by GTL Investments nor a concession by the Government that its allegations were not well founded.