The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice, Washington, DC, and the U.S. Attorney’s Office for the Middle District of Florida in a civil investigation of Regions Bank. Regions Bank has its principal place of business in Birmingham, AL, and became a Federal Housing Administration (FHA)-approved direct endorsement lender in 1985. As a direct endorsement lender, Regions Bank was authorized by HUD to originate and underwrite mortgage loans on HUD’s behalf, including determining a borrower’s creditworthiness and whether the proposed loan met all applicable requirements.
On September 13, 2016, Regions Bank entered into a settlement agreement with the Federal Government to pay $52.4 million to avoid the delay, uncertainty, inconvenience, and expense of lengthy litigation of certain civil claims the Government contended it had against the bank. As part of the settlement, Regions Bank agreed that it engaged in certain conduct in connection with its origination, underwriting, and quality control of certain single-family residential mortgage loans insured by FHA. The settlement was neither an admission of liability by Regions Bank nor a concession by the United States that its claims were not well founded. Of the total settlement of $52.4 million, HUD FHA was to receive $37.7 million, and the remaining portion will be paid to other Federal entities.