The U.S. Attorney’s Office in Manhattan has filed a case against Allied Home Mortgage Capital Corp., its founder and CEO, and its chief compliance officer for engaging in allegedly fraudulent mortgage lending practices.  Although federal regulations require each branch to receive approval to issue HUD-insured loans, Allied allegedly issued such mortgages at locations that had not received HUD approval and then submitted those loans through approved locations.  The complaint also states that Allied attempted to obtain multiple HUD IDs through single sites by adding suite numbers or changing the way the address was written.

According to the government, one third of the loans that Allied issued from 2001 to 2010 defaulted, costing HUD over $800 million.

The complaint included several other allegations, including CEO Jim Hodge’s decision to run real-estate and life-insurance businesses out of branch offices and Allied’s employment of multiple branch managers with criminal backgrounds, with convictions ranging from stealing client money to identity theft to drug distribution.

Read the entire article, “Allied Home Mortgage Sued by U.S. Over Lending Practices”