A federal lawsuit filed against the company that owns the properties that houses the federal government’s Homeland Security Department says it will be paying $200 million to settle a fraud case that alleges the company failed to file federal mortgage documents and did not maintain accurate records for the properties.
The lawsuit filed by the federal Consumer Financial Protection Bureau alleges that the government failed to enforce its mortgage insurance laws, did not properly inspect the properties, and failed to properly enforce mortgage insurance policies.
The complaint alleges the government also violated federal law by failing to make payments on property it owns or by not doing enough to ensure that homeowners pay back their loans.
The government has been paying Ghitis Properties and its subsidiaries, Kapa Properties and Aptos Properties, $300 million for mortgage insurance and other business services over the past two years.
It said the companies failed to comply with their obligations to homeowners.
The U.S. Justice Department, which is prosecuting the case, has said it will seek to collect a civil penalty and to hold Ghitis accountable for the fraud.
The $200-million payment to Ghitis is the largest ever for an individual business in federal court.
The company is being sued by a federal consumer group and the Consumer Financial Safety Board, as well as two California homeowners who claim they were defrauded by the company.
Apts Properties, which has offices in Texas and Florida, was the first major mortgage lender to lose federal approval to offer a home loan, according to the Federal Reserve Bank of Dallas.
The Justice Department also has been investigating whether Apt’s and Kapa’s failures to file and maintain accurate foreclosure records may have contributed to the collapse of the housing market in 2007.
The housing crisis in 2007 brought a series of national and state actions against mortgage lenders, which were intended to curb foreclosures and other types of fraud.
In the federal lawsuit, the Consumer Federation of America said it had obtained documents that showed Apt and Kaca failed to complete and file federal foreclosure records on a number of properties.
Those documents included more than 4,200 foreclosing documents for the three properties the government alleges the companies own.
The bureau filed the lawsuit in U. S. District Court in Washington, D.C. on Tuesday.
The group said in a statement that the court will be hearing a separate lawsuit filed on behalf of two California borrowers who allege that they were harmed by the fraud, including one who lost his home.
The two borrowers are seeking an unspecified amount in damages.