Compu-Link Corporation (Celink) has agreed to pay a $4.25 million civil settlement to the United States to resolve allegations made by the U.S. Justice Department relating to a False Claims Act violation related to its servicing of Home Equity Conversion Mortgage (HECM) products. This is according to a press release from the United States Attorney’s Office for the Middle District of Florida.
The release details the allegations made by the United States by saying that Celink allegedly obtained insurance payments for interest from the Federal Housing Administration (FHA), despite “failing to disclose on the insurance claim forms that the mortgagee was not eligible for such interest payments because it had failed to meet deadlines relating to obtaining an appraisal of the property, commencing foreclosure proceedings, and/or exercising reasonable diligence in prosecuting the foreclosure proceedings to completion,” the release reads.
Because of this, between November 2011, and May 2016, the mortgagees on the affected reverse mortgage loans serviced by Celink allegedly “obtained additional interest that they were not entitled to receive.”
“This settlement represents our office’s continued commitment to protecting the financial solvency of vital financial programs designed to benefit America’s seniors,” said Maria Chapa Lopez, U.S. Attorney for the District Court for the Middle District of Florida. “HECM servicers must be held accountable for failing to adhere to FHA requirements that are designed to ensure the continued viability of the HECM program. We are pleased that Celink cooperated with the investigation and agreed to accept financial responsibility for these failures,” she said.
“Celink cooperated with the Government in this matter, and in order to resolve this matter with finality, agreed to a settlement, which does not involve any admission of liability by Celink,” said Celink CEO Jason McNamara in an emailed statement to RMD. “We are happy to put this matter behind us so that we can remain focused on taking care of our clients and their borrowers.”
This investigation and the resulting settlement stands as proof of the United States Attorney’s Office’s commitment to combat fraud in the reverse mortgage industry, the release says. The claims resolved by this settlement are allegations only, and there has been “no determination of liability,” according to the press release announcing the settlement.