MILWAUKEE, WI, November 02, 2011 /24-7PressRelease/
-- Allied Home Mortgage Capital Corporation and its CEO, Jim Hodge, have been sued by whistleblower Peter Belli, a former Allied branch manager. Belli's case, filed by Attorney Joe Bird, was today adopted by the U.S. government. The government joins Belli and others in claiming that Allied lied about its compliance with HUD regulations.
Allied has long been the target of many enforcement and compliance actions. Starting in 2003, the company has been sanctioned and sued repeatedly, although it has settled in almost every case without the admission of any wrongdoing. Allied has also been the subject of multiple labor actions by former branch managers, loan officers and clerks. In 2007, the company agreed to pay $1.9 million to settle claims arising out of a U.S. Department of Labor investigation.
In the current action, former manager Peter Belli, represented by Mahany & Ertl and Attorney Joe Bird, claims the mortgage giant cut corners in order to write more loans, a practice that lead to HUD and U.S. Attorney Preet Bahara joining Belli in the actions.
The government claims that for loans written by Allied in 2006 and 2007, and later guaranteed by HUD, the default rate is a shocking 55% - one of the highest in the industry.
"Bad loans and sloppy underwriting are what got the U.S. housing market in such a mess," said lead counsel Joe Bird. Partner Brian Mahany added, "This case should send a strong message to Wall Street and other financial centers that if they choose to ignore the rules designed to protect people from the unscrupulous that justice will search them out and find them. As the saying goes, you can run, but you can't hide your misdeeds forever, especially with this Attorney General watching."
Lead counsel on the case announced today will be the U.S. Attorney's Office for the Southern District of New York. Milwaukee law firm Mahany & Ertl and Peter Belli's counsel Joe Bird will remain active in the case.
Mahany & Ertl is a leading boutique law firm concentrating in fraud and asset recovery. Joe Bird is lead counsel on the case and can be reached at (248) 909-4235 (direct). Partner Brian Mahany is a board member of the International Association for Asset Recovery and a leading authority on fraud. Brian can be reached at (414) 704-6731 (direct). Mahany & Ertl has offices in Milwaukee, Portland ME and Detroit.
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