Mortgage companies and other lenders must certify that mortgage applicants meet a range of criteria, such as income and funds available to invest in a home, in order for the Federal Housing Administration to insure a loan. If the mortgage company or lender provides false information to the FHA, that company is liable under the False Claims Act.
RBC Mortgage Co., formerly known as Prism Mortgage, paid $10.7 million to settle a case under the False Claims Act that alleged the company had provided false information to the FHA regarding the borrower's credit, employment or source of equity in 219 loan applications. All of those loans resulted in foreclosure. Three RBC loan officers and 22 others were convicted of criminal charges in the case.