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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, District of New Jersey, in the civil investigation of Freedom Mortgage Corporation.  Freedom has its principal place of business in Mount Laurel, NJ, and became an FHA-approved direct endorsement lender in 1993.  As a direct endorsement lender, Freedom 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 April 15, 2016, Freedom entered into a settlement agreement with the Federal Government to pay $113 million to avoid the delay, uncertainty, inconvenience, and expense of lengthy litigation of certain civil claims the Government contended it had against Freedom.  As part of the settlement, Freedom agreed that it engaged in certain conduct in connection with its origination, underwriting, quality control, self-reporting of loans with unacceptable risk, certification of compliance with program requirements, and endorsement of certain single-family residential mortgage loans insured by FHA.  The settlement was neither an admission of liability by Freedom nor a concession by the United States that its claims were not well founded. Of the total settlement of $113 million, HUD FHA will receive $76 million.