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 District of New Jersey in a civil investigation of Security National Mortgage Company. Security National is a Federal Housing Administration (FHA)-approved mortgage lender with its principal place of business located in Salt Lake City, UT.
On September 22, 2016, Security National entered into a settlement agreement with the Federal Government to pay $4.25 million to avoid the delay, uncertainty, inconvenience, and expense of lengthy litigation. As part of the settlement, Security National agreed that for 100 FHA-insured loans, it engaged in certain conduct in connection with its origination and underwriting of the loans. The settlement was neither an admission of liability by Security National nor a concession by the United States that its claims were not well founded.
As a result of Security National’s conduct, HUD insured loans approved by Security National that were not eligible for FHA mortgage insurance and that HUD would not otherwise have insured. HUD incurred substantial losses when it paid insurance claims on the loans covered by the settlement agreement.