Three multimillion-dollar awards to whistleblowers─including a borrower, two mortgage brokers, and a mortgage executive─could indicate an onslaught of cases against mortgage firms. But there are steps that companies can take to minimize the risk.

Actions brought under the False Claims Act have been lucrative for the government, according to Beth Moskow-Schnoll, a litigation partner at Ballard Spahr who focuses on white collar litigation, regulatory enforcement, and compliance in financial services litigation.

Ms. Moskow-Schnoll said that the mortgage industry is starting to see more of these cases because plaintiffs’ attorneys who had been handling actions in the pharmaceutical industry have found that the industry has remedied many of its issues and that there are now fewer cases.

“When people are getting $18 million as their share, I think it definitely gave plaintiffs’ attorneys the incentive to keep looking for more people to bring actions on behalf of,” Ms. Moskow-Schnoll said, adding that mortgage companies should have a system in place for reporting activity.

“The organization has to take it seriously and actually listen to the complaint and try to do something about it, conduct an investigation, see if there is any validity to the complaint,” she said.

Related Practices

Consumer Financial Services
Mortgage Banking
Real Estate
White Collar Defense/Internal Investigations