JPMorgan Chase, a bank and financial services company, has been assessed to pay $614 million in violation of the False Claims Act. Under this act JPMorgan Chase is accused of knowingly underwriting noncompliant mortgage loans and submitting to the Government for insurance and guarantees. In so doing, JPMorgan Chase sabotages the housing market and curtails the opportunity for millions of Americans to own their own home. It is the kind of fraud that the Government assists in creating by designing entitlement programs that motivate bad behavior, this time housing loans, and then allows Government to step above the mess it has created by feigning its own innocense while it punishes what it points to as the evil doer - this time JPMorgan.
As a part of the settlement JPMorganChase admitted that they had approved hundreds of VA loans and thousands of FHA loans that were not eligible for either agency's housing programs. In the past ten years JPMorgan Chase cranked out thousands of loans to unqualified individuals as the Government put heavy pressure to have them put the dollars to work, while executives were rewarded with bonuses by getting those dollars to work. When these loans defaulted as would be expected given the bad actors from the Government to JPMorgan itself in the process, the Government was left to cover the loss with the taxpayer's own money. JPMorgan Chase has been forced to accept responsibility for this misconduct of its loan officers, and HUD, VA, and FHA can go back and try to recoup lost payments from JPMorgan Chase and go back to trying to get the money back out into the marketplace, while Government attempts to hold interest rates down as long as it possibly can. Payment awards to the whistleblowers from the HUD IG office will take time because of the slow process to settle claims against the lending institution, but they will come - with the relator receiving somewhere between 15% to 30% of the amount of money returned to the US Government.