BANK TO PAY OVER $212 MILLION TO RESOLVE FALSE CLAIMS ACT ALLEGED VIOLATIONS

FROM:  U.S. JUSTICE DEPARTMENT
Monday, June 1, 2015
First Tennessee Bank N.A. Agrees to Pay $212.5 Million to Resolve False Claims Act Liability Arising from FHA-Insured Mortgage Lending

First Tennessee Bank N.A. has agreed to pay the United States $212.5 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today.  First Tennessee is headquartered in Memphis, Tennessee.

“First Tennessee’s reckless underwriting has resulted in significant losses of federal funds and was precisely the type of conduct that caused the financial crisis and housing market downturn,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “We will continue to hold accountable lenders who put profits before both their legal obligations and their customers, and restore wrongfully claimed funds to FHA and the treasury.”

Between January 2006 and October 2008, First Tennessee, through its subsidiary First Horizon Home Loans Corporation (First Horizon), participated in the FHA insurance program as a Direct Endorsement Lender (DEL).  As a DEL, First Tennessee had the authority to originate, underwrite and endorse mortgages for FHA insurance.  If a DEL such as First Tennessee approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan.  Under the DEL program, neither the FHA nor HUD reviews a loan before it is endorsed for FHA insurance.  DELs such as First Tennessee are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices and to self-report any deficient loans identified by their quality control program.  In August 2008, First Tennessee sold First Horizon to MetLife Bank N.A. (MetLife), a wholly-owned subsidiary of MetLife Inc., which thereafter originated FHA-insured mortgages under the MetLife name.  In February 2015, MetLife agreed to pay $123.5 million to resolve its False Claims Act liability arising from its FHA originations after it acquired First Horizon from First Tennessee.

“First Tennessee admitted failings that resulted in poor quality FHA loans,” said Acting U.S. Attorney John A. Horn of the Northern District of Georgia.  “While First Tennessee profited from these loans, taxpayers incurred substantial losses when the loans defaulted.  The settlement, as well as the investigation that preceded it, illustrates that the Department of Justice will closely scrutinize entities that cause financial injury to the government, and, in turn, the American taxpayer.”

The settlement announced today resolves allegations that First Tennessee failed to comply with FHA origination, underwriting and quality control requirements.  As part of the settlement, First Tennessee admitted to the following facts: From January 2006 through October 2008, it repeatedly certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements.  Beginning in late 2007, First Tennessee significantly increased its FHA originations.  The quality of First Tennessee’s FHA underwriting significantly decreased during 2008 as its FHA lending increased.  Beginning no later than early 2008, First Tennessee became aware that a substantial percentage of its FHA loans were not eligible for FHA mortgage insurance due to its own quality control findings.  These findings were routinely shared with First Tennessee’s senior managers.  Despite internally acknowledging that hundreds of its FHA mortgages had material deficiencies, and despite its obligation to self-report findings of material violations of FHA requirements, First Tennessee failed to report even a single deficient mortgage to FHA.  First Tennessee’s conduct caused FHA to insure hundreds of loans that were not eligible for insurance and, as a result, FHA suffered substantial losses when it later paid insurance claims on those loans.

“Our investigation found that First Tennessee caused FHA to pay claims on loans that the bank never should have approved and insured in the first place,” said HUD Inspector General David A. Montoya.  “This settlement reinforces my commitment to combat fraud in the origination of single family mortgages insured by the FHA and makes certain that only qualified, creditworthy borrowers who can repay their mortgages are approved under the FHA program.”

“We are pleased that First Tennessee has acknowledged facts that demonstrate its failure to comply with HUD’s requirements and has agreed to settle with the government,” said HUD General Counsel Helen Kanovsky.  “We thank the Department of Justice and HUD’s Office of Inspector General for all of their efforts in helping us to make this settlement a reality.  We hope this agreement sends a message to those lenders with whom we do business that HUD takes compliance very seriously and so should they.”

The investigation of the allegations in the government’s complaint was a coordinated effort between the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Northern District of Georgia, HUD and HUD’s Office of Inspector General.

WHITE HOUSE FACT SHEET: PREVENTING , ENDING VETERAN HOMELESSNESS

FROM:  THE WHITE HOUSE
April 20, 2015
FACT SHEET: Preventing and Ending Veteran Homelessness

The President has pledged not just to address veteran homelessness, but to end it. The Administration has made historic investments, using proven strategies in partnership between HUD and VA, to achieve this goal.  We’ve helped veterans and their families access rapid rehousing when falling into homelessness, and have aided chronically homeless veterans in stabilizing their lives through permanent supportive housing, which – in addition to serving those veterans – generates public sector savings exceeding the cost of the intervention.

As a result, we’ve made strong progress.  Since 2010, nearly 230,000 veterans and their family members have been supported by HUD’s targeted housing vouchers and VA homelessness programs designed to permanently house, rapidly rehouse, or prevent families from falling into homelessness. According to the most recent nationwide data, from 2010 to January 2014 the total number of homeless veterans nationwide declined 33 percent, and the number of unsheltered veterans – those sleeping on the street or outside at night – declined 44 percent.  While more work remains, this overall progress shows that veteran homelessness is not an intractable problem, it is a challenge that can be solved over time if we act decisively and have a shared commitment from the Federal government, state and local governments, private businesses, philanthropies, and communities.

Ending veteran homelessness does not mean that we can prevent every veteran from facing a housing crisis in the future.  But it does mean that when and if a housing crisis does occur, we can have systems in place to identify and quickly house all of our veterans.

Local Progress

Reaching the goal of ending veteran homelessness will require ramped up engagement from partners across the country and at the state and local level, in collaboration with the federal government. In June 2014, as part of Joining Forces, the First Lady helped to launch the Mayors Challenge to End Veteran Homelessness to help advance this work.  As part of the Challenge, 570 mayors, governors, and other local officials have committed to ending veteran homelessness in their communities by the end of this year – an unprecedented expression of the local commitment that is required to end veteran homelessness. Last week, the First Lady held a call with mayors who are committed to the challenge, discussing specific actions they can take to end veteran homelessness in their communities.

In December 2014, New Orleans became the first major city to meet the challenge and end veteran homelessness, and state and local communities around the country are working to this goal. Today, to help other cities learn from the progress underway, First Lady Michelle Obama is taking part in a forum for mayors and local leaders in New Orleans, as part of the Joining Forces initiative’s continued work to advance the Mayors Challenge.  At the forum, New Orleans Mayor Mitch Landrieu, federal officials, and community partners will discuss the strategies New Orleans used to effectively end homelessness among veterans a year ahead of the national goal.

New Orleans is not alone in making dramatic progress on ending veteran homelessness – other communities, such as Houston, Phoenix, and Salt Lake City, have reached major milestones, and continue to strive toward the goal of ending homelessness among veterans by the end of 2015. Achieving this goal means that veterans are not sleeping on our streets, all veterans in shelter or transitional housing are connected to permanent housing, and communities have systems in place to prevent and end future homelessness among veterans quickly and efficiently, ensuring that it is a rare, brief, and non-recurring experience.

Administration Efforts

To work with communities in achieving this goal, the Administration has invested significant new resources and focus. Almost 70,000 HUD-VASH housing vouchers have been provided to over 400 Public Housing Authorities (PHAs) nationwide to date, and another 10,000 vouchers will be awarded in fiscal year 2015.  The President’s FY 2016 budget includes a total of $1.4 billion for VA programs that prevent or end homelessness among veterans, including $300 million for Supportive Services for Veterans Families (SSVF) and $374 million for case management and other supportive services to support nearly 95,000 veterans in the HUD-Veterans Affairs Supportive Housing (HUD-VASH) program. Federal agencies are also working together to speed progress in local communities, providing guidance and support to leaders who have signed on to the Mayors Challenge, and encouraging all communities to conduct point-in-time counts of unsheltered people in January 2016, to obtain an accurate assessment of the number of homeless individuals at the end of 2015.

These federal efforts are all aimed at supporting local communities to implement the strategies that are proving effective in promoting rapid access to permanent housing for all veterans.

Essential strategies at the community level include:

Creating coordinated assessment and entry systems to ensure that there is no wrong door for veterans seeking help and to create more efficient pathways out of homelessness and into permanent housing;

Conducting coordinated outreach and engagement efforts to proactively seek out veterans in need of assistance, sharing information across outreach teams and sites, and collaborating across systems, including law enforcement, prisons and jails, hospitals, libraries, and job centers;

Identifying all veterans experiencing homelessness within the community by name and creating a shared list of veterans experiencing homelessness to ensure that no veteran and his or her family falls through the cracks and that all are linked to the most appropriate housing and services options;

Setting concrete and ambitious monthly or quarterly goals for helping veterans and their families get back into housing as a strategy for pushing local systems to perform with maximum efficiency and achieve better outcomes;

Implementing Housing First practices and approaches across every part of the homelessness services and housing systems, removing barriers to help veterans and their families obtain permanent housing as quickly as possible, without unnecessary prerequisites; and Increasing connections to employment by collaborating with Workforce Investment Boards, homelessness services and housing organization, VA Medical Centers, and employers, recognizing that employment and income are critical to the ability of people to obtain and sustain housing stability and avoid future crises.

These strategies, essential for ending veteran homelessness, will also help communities to work toward ending homelessness for every American child, youth, adult, and family. For more details regarding Federal programs and the most effective strategies for ending veteran homelessness, see USICH’s webpage and VA’s webpage. For more details about the Mayors Challenge, and the list of elected officials who have signed on, visit HUD’s webpage.

Earlier this year, Administration officials fanned out across the country to participate in the annual Point-in-Time (PIT) counts.  HUD requires its partner communities to conduct at least a biannual PIT count of homeless persons who are unsheltered.  For this year’s PIT count, Secretaries Castro, McDonald, and Perez, along with White House Chief of Staff Denis McDonough, OMB Director Shaun Donovan, and other Senior Administration Officials participated alongside volunteers to help shed light on the efforts underway and the additional commitments needed to reach the goal of ending veteran homelessness.

HUD TOUTS PROGRESS AMONG KEY INDICATORS FROM MAY HOUSING SCOREBOARD

FROM:  U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

WASHINGTON- The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the May edition of the Obama Administration's Housing Scorecard – a comprehensive report on the nation’s housing market. The latest data show progress among key indicators, including growing equity and a rebound in the sale of new and existing homes. While this scorecard notes positive overall trends in the housing market, officials caution that the harsh winter slowed growth as the economy recovers from the Great Recession.

“May’s Housing Scorecard shows that the housing market recovery is picking up after the harsh winter months,” said HUD Assistant Secretary for Policy Development and Research Katherine O’Regan. “More homeowners have positive equity, foreclosures continue their downward trend, and sales of new and existing homes are rebounding. While these are all good signs, it’s clear that we must remain committed to helping homeowners as they recover from the worst housing recession since the Great Depression.”

“The standards set by the Making Home Affordable program have significantly changed the mortgage servicing industry,” said Treasury Acting Assistant Secretary Tim Bowler. “Treasury is committed to holding servicers accountable to these standards, and as a result has seen continued improvement by the largest servicers.”

The May Housing Scorecard features key data on the health of the housing market and the impact of the Administration’s foreclosure prevention programs, including:

Homeowners’ equity shows another strong gain.According to the Federal Reserve, homeowners’ equity was up nearly $795 billion in the first quarter of 2014, reaching more than $10.8 trillion, the highest level since the second quarter of 2007.  Homeowners’ equity has risen sharply since the beginning of 2012, with equity up 73 percent, or nearly $4.6 trillion through the first quarter of 2014.  The change in equity since April 1, 2009 now stands at more than $4.7 trillion.

In the first quarter of 2014, more than 300,000 borrowers returned to a position of positive equity in their homes. According to CoreLogic, the number of underwater borrowers (those who owe more on their mortgage than the value of their home) has fallen 48 percent--from 12.108 million to 6.284 million--lifting more than 5.8 million homeowners above water from the beginning of 2012 through the 1st quarter of 2014. Approximately 12.7 percent of residential properties with a mortgage are still underwater, however.

Foreclosure starts continue their downward trend.  Lenders started the public foreclosure process on 49,240 U.S. properties in May, down 10 percent from the previous month and down 32 percent from one year ago to the lowest level since December 2005—a 101-month low (although foreclosure starts were up from a year ago in 12 states). (Source: Realty Trac)

Purchases of new homes rebounded in April after declining for four out of the previous five months.New home sales were up 6.4 percent to 433,000 (SAAR) in April, following a 407,000 pace in March, but were down 4.2 percent from one year ago. (Source:  HUD and Census Bureau).

Sales of previously owned (existing) homes rose in April for the first time this year. The National Association of Realtors® (NAR) reported that existing homes—including single-family homes, townhomes, condominiums, and cooperatives—sold at a seasonally adjusted annual rate (SAAR) of 4.65 million in April, up 1.3 percent from March but still 6.8 percent below the 4.99 million pace a year-earlier. The weakness in sales reflects low inventory, strict bank lending standards, fewer distressed properties on the market, and less favorable housing affordability.

The Administration's foreclosure mitigation programs continue to provide relief for millions of homeowners as the recovery from the housing crisis continues. In all, more than 8.3 million mortgage modification and other forms of mortgage assistance arrangements were completed between April 2009 and the end of April 2014. More than 2.0 million homeowner assistance actions have taken place through the Making Home Affordable Program, including nearly 1.4 million permanent modifications through the Home Affordable Modification Program (HAMP), while the Federal Housing Administration (FHA) has offered 2.3 million loss mitigation and early delinquency interventions through April. The Administration’s programs continue to encourage improved standards and processes in the industry, with HOPE Now lenders offering families and individuals more than 4.0 million proprietary modifications through March (data are reported with a 2-month lag).

SIX FLORIDIANS PLEAD GUILTY TO MORTGAGE FRAUD INVOLVING CONDOMINIUM DEVELOPMENTS

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, May 15, 2014

Six Miami-Area Residents Plead Guilty to Mortgage Fraud Scheme Involving Four Condominium Developments

Six Miami-area residents, including three former loan officers, pleaded guilty in the Southern District of Florida this week to participating in a fraudulent scheme designed to enrich real estate developers by selling condominium units to straw buyers.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Special Agent in Charge Phyllis Robinson of the Department of Housing and Urban Development’s Office of the Inspector General (HUD-OIG) in Miami and Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency (FHFA) made the announcement.

Today, Leidy Masvidal, 42, of Miami, pleaded guilty before U.S. District Court Judge Marcia G. Cooke to conspiring to commit bank fraud.   Sentencing is scheduled for Sept. 24, 2014.   Alfredo Jesus Chacon, 48, of Orange Park, Florida, and Francisco Martos, 63, and Dorian Wong Magarino, 49, both of Miami, also pleaded guilty today to conspiring to commit wire fraud and mail fraud before U.S. District Court Judge Ursula Ungaro.   Sentencing is scheduled for Aug. 1, 2014.

On May 14, 2014, Tania Masvidal, 49, and Douglas Ponce, 40, both of Miami, each pleaded guilty before Judge Cooke to conspiring to commit bank fraud.  Sentencing is scheduled for July 30, 2014.

According to the defendants’ plea agreements and other court documents, the defendants participated in a scheme to pay straw buyers to submit false loan applications to lending institutions to purchase condominiums owned by co-conspirators.   Leidy Masvidal and Tania Masvidal used a mortgage brokerage they owned, EZY Mortgage Inc., to arrange financing for the purchases.   Because the straw buyers were not credit-worthy, the Masvidals secured loans in their names by submitting to lending institutions loan applications and other fraudulent documents containing false statements about the buyers’ income, employment and assets, and falsely stating that the buyers intended to reside in the properties.   Additionally, the Masvidals enabled their co-conspirators to secretly fund the buyers’ obligations to pay money at closing (known as “cash to close” obligations) by establishing shell corporations, which the co-conspirators used to funnel cash from conspirators to the escrow account used at closing, as well as paying the straw buyers.   The co-conspirators compensated the Masvidals for their role in the scheme by sending kickback payments taken from the loan proceeds to the Masvidals’ shell corporations for every straw buyer identified.

According to admissions in court records, Martos was a former loan officer at a mortgage company known as State Lending who helped secure financing for straw buyers in exchange for kickbacks by procuring false employment documents and by including false information in buyers’ loan applications. Chacon and Ponce recruited straw buyers to purchase properties owned by co-conspirators in exchange for kickbacks paid from the sales proceeds.   Chacon also allowed a company that he controlled to be used as a false employer for the straw buyers.   Magarino accepted payments to act as one of Chacon’s straw buyers and recruited other straw buyers into the scheme.   For the properties in which Margarino acted as the straw buyer, he represented to the lender that he personally met his cash-to-close obligations when in fact he knowingly paid these costs with funds supplied by conspirators.

Many of the straw buyers defaulted on their loans after the conspirators stopped making their mortgage payments on their behalf, causing millions of dollars in losses to lenders.

On March 31, 2014, Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez, Marie Mendez, Wilkie Perez and Enrique Angulo were indicted in the Southern District of Florida for their alleged participation in this scheme.   They have pleaded not guilty and trial is currently set for Sept. 8, 2014.   The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The case is being investigated by HUD-OIG and FHFA-OIG.  The case is being prosecuted by Trial Attorneys Gary A. Winters and Brian Young of the Criminal Division’s Fraud Section.

JUSTICE ANNOUNCES INDICTMENTS IN FLORIDA MORTGAGE FRAUD SCHEME

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, March 31, 2014
Seven Indicted in Florida in Mortgage Scheme

Seven individuals have been indicted in the Southern District of Florida for their alleged participation in a mortgage fraud scheme in the Miami area.

The charges were announced by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Inspector General David A. Montoya of the Department of Housing and Urban Development and Acting Inspector General Michael P. Stephens of the Federal Housing Finance Agency’s Office of the Inspector General.

A 19-count indictment, returned on March 13, 2014, by a federal grand jury and unsealed today, charges Miami-Dade County residents Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez, Marie Mendez, Wilkie Perez and Enrique Angulo with one count of conspiracy to commit wire and bank fraud.   Some of those defendants have also been charged with bank fraud and wire fraud.   Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez were taken into custody today and made their initial appearances before United States Magistrate Judge Jonathan Goodman in Miami, while the other three defendants remain at large.

As alleged in the indictment, Luis Mendez, Stavroula Mendez, Luis Michael Mendez, Lazaro Mendez and Marie Mendez owned or controlled various real estate properties in the Miami area.   They enlisted mortgage brokers and other individuals, including Perez and Angulo, to recruit straw buyers to act as qualifying mortgage applicants to fraudulently purchase condominiums in the properties.   The defendants prepared and caused to be prepared loan documents containing false statements and representations relating to the buyers’ income, assets and other information necessary to enable lenders to assess the buyers’ qualifications to borrow money, which induced the lenders to make loans to finance the condominiums.   Luis Michael Mendez and Marie Mendez are alleged to have submitted their own fraudulent loan applications for two condominiums, and they, as well as Luis Mendez and Stavroula Mendez, advanced the buyers cash to close the transactions.

After the loans were funded, the defendants allegedly caused fraudulent payments to be made from the loan proceeds to pay kickbacks through shell companies to the brokers, recruiters and straw buyers, as well as to pay the mortgages to conceal the conspiracy.   Eventually, the conspirators were unable to make mortgage payments, causing many of the condominium units to go into foreclosure and leading to losses by the lenders.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The case is being investigated by HUD-OIG and FHFA-OIG.  The case is being prosecuted by Trial Attorneys Gary A. Winters and Brian Young of the Criminal Division’s Fraud Section.

DOJ SETTLES FAIR HOUSING LAWSUIT WITH HOMEOWNERS ASSOCIATION

FROM:  U.S. DEPARTMENT OF JUSTICE 
Tuesday, August 13, 2013
Justice Department Reaches Settlement with Homeowners Association and Property Management Company in Fair Housing Lawsuit Involving Occupancy Limits

The Justice Department announced today that the Townhomes of Kings Lake HOA Inc. (HOA) and Vanguard Management Group Inc. have agreed to pay $150,000 to settle a lawsuit alleging violations of the Fair Housing Act (FHA).  The lawsuit alleged that the HOA adopted and both defendants enforced occupancy limits that discriminated against families with children at the Townhomes of Kings Lake, a 249-townhome community in Gibsonton, Fla.

Under the proposed consent decree, which must still be approved by the U.S. District Court for the Middle District of Florida, the defendants will pay $45,000 to the family that initiated the original complaint filed with the U.S. Department of Housing and Urban Development (HUD), $85,000 into a victim fund to compensate other aggrieved families, and $20,000 to the United States as a civil penalty.  In addition, the proposed consent decree prohibits the defendants from discriminating in the future against families with children and requires the defendants to receive training on the requirements of the FHA.  In January 2013, while the lawsuit was pending, the HOA modified its occupancy limits to permit four occupants in 2-bedroom townhomes, six occupants in 3-bedroom townhomes, and eight occupants in 4-bedroom townhomes.

“The Fair Housing Act ensures that families with children are not denied their housing rights based on discriminatory occupancy policies,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “The Justice Department will continue to vigorously enforce fair housing laws that protect the rights of families with children.”

The lawsuit, filed in October 2012, arose from a complaint filed with HUD by a family with six children that was living at the Townhomes of Kings Lake.  After the family moved into their 4-bedroom townhome, the defendants indicated there was a problem with the number of people living in the home and threatened to evict the family.  The family eventually moved out of the Kings Lake community.  After HUD investigated the complaint, it issued a charge of discrimination and referred the matter to the Justice Department.  The lawsuit alleged that the defendants violated the family’s rights, that the restrictive occupancy policies discriminated against other families with children, and that the defendants engaged in a pattern or practice of discrimination or denied rights protected by the FHA to a group of persons.

“Twenty-plus years of HUD guidance and cases have put housing providers on notice that occupancy standards which unfairly limit or exclude families with children violate the Fair Housing Act,” said Bryan Greene, HUD’s Acting Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Department of Justice are committed to making sure that all people have equal access to the housing for which they financially qualify.”

U.S. GOVERNMENT STRIVES FOR HEALTHIER HOMES

FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY
Federal Agencies Working to Make Homes Healthier
Improving housing quality can dramatically affect the health of residents

WASHINGTON – Several federal agencies today unveiled Advancing Healthy Housing – A Strategy for Action. White House Council on Environmental Quality (CEQ) Chair Nancy Sutley, Environmental Protection Agency (EPA) Administrator Lisa P. Jackson, Secretary of Housing and Urban Development (HUD) Shaun Donovan, Surgeon General Regina Benjamin, M.D., and Deputy Secretary of Energy Daniel Poneman discussed the new plan during an event at the National Building Museum this morning.

The initiative represents a bold new vision for addressing the nation’s health and economic burdens caused by preventable hazards associated with the home. The Strategy for Action encourages federal agencies to take preemptive actions that will help reduce the number of American homes with health and safety hazards.

People in the United States spend about 70% of their time in a home. Currently, millions of U.S. homes have moderate to severe physical housing problems, including dilapidated structure; roofing problems; heating, plumbing, and electrical deficiencies; water leaks and intrusion; pests; damaged paint; and high radon gas levels. These conditions are associated with a wide range of health issues, including unintentional injuries, respiratory illnesses like asthma and radon-induced lung cancer, lead poisoning, result in lost school days for children, as well as lost productivity in the labor force. The health and economic burdens from preventable hazards associated with the home are considerable, and cost billions of dollars.

The Strategy for Action unifies, for the first time, federal action to advance healthy housing, demonstrating the connection between housing conditions and residents’ health. It also promotes strategies and methods intended to reduce in-home health hazards in a cost-effective manner.

"It is clear that unhealthy and unsafe housing has an impact on the health of millions of people in the United States, which is why we must do everything we can to ensure that individuals and families have a healthy place to call home," said HUD Secretary Shaun Donovan. "Today’s announcement will help the federal government unify action to controlling and preventing major housing-related exposures and hazards."

"Thanks to unprecedented collaboration across the federal family and among our many partners, we now have a specific plan for action to address radon and other preventable hazards found in homes across the country. This is important progress, especially when you consider that people spend an estimated 70 percent of their time inside a home," said EPA Administrator Lisa P. Jackson. "At EPA we’re committed to ensuring Americans in all communities have healthy places to live, work and play, and the strategy we announced today is a critical step toward reaching that goal."

"Healthy homes and communities are essential to our quality of life, our productivity, and our economic vitality," said Nancy Sutley, Chair of the Council on Environmental Quality. "Through this plan, Federal agencies have committed to working together to make sure all Americans can count on safe, healthy places to live, grow, and thrive."

Dr. Mary Jean Brown, Chief of CDC’s Healthy Homes and Lead Poisoning Prevention Branch added, "Healthy homes lead to healthier lives. People can take simple steps to protect themselves from health hazards in the home."

"Energy efficiency and healthy homes are inextricably linked," explained U.S. Deputy Secretary of Energy Daniel Poneman. "We cannot, in good conscience, pursue one in the absence of the other. DOE is committed to ensuring that our efforts towards creating an efficient national housing stock also strive to maximize the health and safety of the families we serve."

The overall vision for the Strategy is to reduce the number of American homes with residential health and safety hazards, achieved through five goals:

1. Establish healthy homes recommendation

2. Encourage adoption of healthy homes recommendations

3.Create and support training and workforce development to address health hazards in housing

4. Educate the public about healthy homes

5. Support research that informs and advances healthy housing in a cost-effective manner

FORMER SUPERVISOR OF ROYAL OAK, MICHIGAN SENTENCED FOR VIOLATING CLEAN AIR ACT

FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY
Supervisor of Michigan Town Sentenced to Three Years in Prison
WASHINGTON (August 3, 2012) - William Morgan, the former supervisor of Royal Oak Township, a suburb of Detroit, was sentenced in federal court to three years in prison. Mr. Morgan had previously entered a guilty plea to charges that he conspired to defraud the U.S. Department of Housing and Urban Development (HUD), violate the Clean Air Act’s asbestos requirements, and commit bribery. Asbestos is a mineral fiber that has been used commonly in a variety of building construction materials. When asbestos-containing materials are damaged or disturbed by repair, remodeling or demolition activities, microscopic fibers become airborne and can be inhaled into the lungs, where they can cause serious health problems.

"It is reprehensible that a public official made asbestos abatement decisions based on a bribe, not on what was needed to protect the health of the community," said Randall Ashe, special agent in charge of EPA’s criminal enforcement program in Michigan. "The sentence shows that government officials who attempt to line their pockets rather than carry out their responsibilities honestly will be prosecuted to the full extent to the law."

"Any public official, in city or suburb, who works to enrich himself at the expense of the public will be detected and prosecuted," U.S. Attorney Barbara L. McQuade said. "It is particularly disturbing when an official not only takes bribes but also endangers community health and the environment by allowing the bribes to influence abatement decisions."

Morgan’s criminal conduct involved the awarding of a contract and distribution of federal funds that were intended to be used by communities for the improvement of blighted areas by removing dilapidated buildings. The funding was received through HUD’s Neighborhood Stabilization Program (NSP). Morgan, in addition to being Township supervisor, was also Royal Oak’s coordinator for NSP.

Prior to the awarding of the contract, Morgan had received a $10,000 bribe from Sureguard/PBM, one of the companies that submitted a bid for the demolition and asbestos removal of an abandoned theater on Eight Mile road. In return for the bribe, Morgan attempted to steer the contract to Sureguard/PBM. Despite Morgan’s efforts, Royal Oak’s Board of Supervisors awarded the contract to another company, which had submitted a lower bid.

During the demolition process, Morgan asked for and received cash payments of $500 and $1,000 from the owner of the company that had won the contract. Morgan received these payments under the belief that they were in return for his approval of a change order covering the asbestos abatement that fraudulently inflated the cost of the work.

One of Morgan’s co-conspirators, Terrance Parker, received a sentence of 21 months. Two other co-conspirators, Kendrick Covington and Marcus Brown have yet to be sentenced.

The case was investigated by special agents of the Federal Bureau of Investigation (FBI), HUD’s Office of the Inspector General and EPA’s Criminal Investigation Division.

LOAN OFFICER SENTENCED FOR ROLE IN $9.2 MILLION MORTGAGE FRAUD

FROM:  U.S. DEPARTMENT OFF JUSTICE
Monday, June 25, 2012
Loan Officer Sentenced to 54 Months in Prison for Role in Mortgage Fraud Scheme That Resulted in More Than $9.2 Million in Losses
WASHINGTON – A loan officer for a Florida mortgage company was sentenced today in Miami to 54 months in prison for his role in a mortgage fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, and Department of Housing and Urban Development (HUD) Inspector General David A. Montoya.

Alejandro aka “Alex” Curbelo, 32, of Miami was sentenced before U.S. District Judge Joan Lenard.  In addition to his prison term, Curbelo was sentenced to three years of supervised release and was ordered to pay $9.2 million in restitution to HUD.  Curbelo was indicted and arrested on Jan. 24, 2012, and pleaded guilty on April 16, 2012, to one count of conspiracy to commit wire fraud.

According to court documents, from approximately February 2006 through July 2008, Curbelo was employed as a loan officer for Great Country Mortgage Bankers.  In this role, he assisted in the sales and financing of condominium units at two complexes in Florida – Dadeland Place and Pelican Cove on the Bay.  The borrowers who Curbelo assisted at these two complexes were unqualified to obtain mortgage loans due to insufficient income, high levels of debts and outstanding collections.

Curbelo admitted that he conspired with others to create and submit false and fraudulent Federal Housing Administration (FHA) mortgage loan applications and accompanying documents to the lender on behalf of the unqualified borrowers.  Curbelo and others offered the borrowers cash back after closing as an incentive for them to purchase the units.  These payments were not disclosed properly during the loan application process.  According to court documents, the closing costs were paid on behalf of the borrowers by interstate wire.  After the loans closed, the unqualified borrowers failed to meet their monthly mortgage obligations and defaulted on their loans.

According to court documents, when the loans went into foreclosure, HUD, which insured the loans, was required to take title to the units and pay the outstanding loan balances to the lenders.  As of the date of the sentencing hearing, HUD paid more than $9.2 million for losses related to Curbelo’s conduct.

This case was investigated by the HUD Office of Inspector General, as participants in the Miami Mortgage Fraud Strike Force.  Trial Attorney Mary Ann McCarthy of the Fraud Section in the Justice Department’s Criminal Division is prosecuting the case with assistance from the U.S. Attorney’s Office for the Southern District of Florida.
               
This prosecution is part of efforts under way by the Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.

REDUCING ASTHMA RATES AND CONTROLLING PROBLEM AMONG RACIAL AND ETHNIC MINORITIES

Photo Credit:  Wikimedia 
FROM:  U.S. ENVIRONMENTAL PROTECTION AGENCY
Obama Administration Working to Close Racial, Ethnic Gap on Asthma
Asthma disproportionately affects minority children, children living below poverty level
WASHINGTON – Today U.S. federal agencies unveiled the Coordinated Federal Action Plan to Reduce Racial and Ethnic Asthma Disparities. White House Council on Environmental Quality (CEQ) Chair Nancy Sutley, Environmental Protection Agency (EPA) Administrator Lisa P. Jackson, Secretary of Health and Human Services (HHS) Kathleen Sebelius and Secretary of Housing and Urban Development (HUD) Shaun Donovan discussed the new plan during an event at Town Hall Education Arts Recreation Campus (THEARC), which houses The Boys and Girls Club of Greater Washington along with other community groups.

Nearly 26 million Americans are affected by this chronic respiratory disease, including 7 million children, especially minority children and children with family incomes below the poverty level. Asthma rates of African American children are currently at 16 percent, while 16.5 percent of Puerto Rican children suffer from the chronic respiratory disease, more than double the rate of Caucasian children in the United States. The annual economic cost of asthma, including direct medical costs from hospital stays and indirect costs such as lost school and work days, amounts to approximately $56 billion.

“Across America we see low-income and minority children and families at a disproportionately higher risk for asthma and respiratory illnesses. Air pollution and other challenges are having serious health effects, which compound economic challenges through medical bills and missed school and work days,” said EPA Administrator Lisa P. Jackson. “As the mother of a child with asthma, I know what it means for our children to have clean and healthy air to breathe. This Action Plan enables federal agencies and our partners to work more collaboratively and comprehensively on tackling a major health threat, so that we can protect all Americans, no matter what community they call home.”

“Low-income and minority communities often face an unacceptable burden of pollution in this country, diminishing their economic potential and threatening the health of millions of American families,” said Nancy Sutley, Chair of the White House Council on Environmental Quality. “As we close National Asthma Awareness Month today, the President’s Administration is standing behind his commitment to integrating environmental justice into the missions of federal agencies, promoting clean air and healthy communities, and ensuring this really is a country of equal opportunity for all.”

“The report is a blueprint for how we can work together to reduce asthma disparities and help ensure children with asthma get the right care with the right support,” said Secretary Sebelius. “One key factor that is so critical to controlling a child’s asthma is access to health care. Uninsured people with asthma are less likely to take the preventive medicine they may need to keep their condition under control, making them more likely to suffer an attack. That’s why we are focused on expanding access to care.”

HUD Secretary Shaun Donovan said, “The numbers don’t lie: Asthma disproportionately impacts low-income minority families which is why we must do everything we can to ensure all children have a healthy place to call home. Today’s announcement will help the federal government support the development of innovative new approaches to improve and control asthma.”

The action plan will coordinate efforts to improve asthma management and prevention:
Reduce barriers to asthma care: Ensure that the populations most severely impacted by asthma receive evidence-based comprehensive care, which includes access to medical services, education and environmental interventions.

Build local capacity: Enhance capacity to deliver integrated, community-based asthma care systems.
Target services: Identify the children, families and communities most impacted by asthma disparities.
Accelerate prevention efforts: Increase understanding of the cause or causes of asthma and test interventions that may prevent the onset of asthma.