The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, assisted the U.S. Department of Justice Washington D.C., and the U.S. Attorney’s Offices of the Northern District of Georgia and Northern District of California, in the civil investigation of Prospect Mortgage, LLC.
Based in part on our review, the Federal Government alleged that Prospect violated the False Claims Act when it originated and underwrote Federal Housing Administration (FHA) mortgage loans that did not meet applicable requirements. The Federal Government also alleged that Prospect did not maintain a quality control program that complied with requirements. On June 30, 2017, Prospect entered into a settlement agreement with the Federal Government to pay $4.157 million to avoid the delay, uncertainty, inconvenience, and expense of lengthy litigation. Of the total settlement of $4.157 million, HUD FHA was to receive $2.93 million, and the remaining funds will be paid to other Federal entities.