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IBERIABANK to pay $11.69M for false loan guarantee claims

Lafayette, LA
12/08/2017
Fine Amount: 
$11,692,149
Penalty Type: 
Issued by: 

The Justice Department announced Friday that IBERIABANK Corporation, IBERIABANK and IBERIABANK Mortgage Company have agreed to pay the United States $11,692,149 to resolve allegations they violated the False Claims Act by falsely certifying they were complying with Federal requirements in order to obtain insurance on mortgage loans from the Federal Housing Administration.

According to DOJ's press release, IBERIABANK was a direct endorsement lender from 2005 through 2014, and certified for FHA insurance mortgage loans that did not meet HUD underwriting and origination requirements and were, therefore, ineligible for FHA mortgage insurance under the DE program. HUD paid FHA insurance claims on certain of these ineligible mortgages, including those where IBERIABANK’s loan files contained inadequate documentation of the borrower’s income, unresolved appraisal discrepancies concerning declining home values in the relevant neighborhood, and inadequate verification related to the borrower’s down payment.

In addition, after being informed by HUD that it was not in compliance with an FHA underwriter commission prohibition, and advising HUD it was no longer paying underwrite commissions, IBERIABANK was paying underwriters incentive payments through 2014.

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