$41m FHA endorsements settlement

Quite fascinating: ABN AMRO Mortgage Group has agreed to pay $16.85 million and to refrain from submitting defaulted loan claims that would have cost the FHA a further $24.35 million. The allegations involved had to do with allegedly false certifications on some 28,000 loans that ABN AMRO underwrote. FHA had granted the company "direct endorsement authority," meaning the company itself had a lot of power to decide whether a loan qualified for FHA insurance or not.

The HUD Office of Inspector General has spent quite a lot of time in the past on allegations of sloppy or incomplete work by private companies that HUD was trusting to investigate whether individual home purchase loans were good risks for FHA insurance. Look up a phrase like "insurance endorsement" on the OIG audit search page and you'll see what I mean.

Also interesting in this press release is the prominent quote from HUD's new General Counsel, Keith Gottfried, evidently an able attorney and accountant. Mr. Gottfried racked up an impressive record as a Silicon Valley corporate counsel and a board member of the Business Software Alliance before leaving Borland Software Corp. in 2004. He apparently worked on the most recent Bush/Cheney campaign and (per the WayBack Machine archive) was listed on www.georgebush.com as a "Maverick"-level campaign fundraiser as of 2004.