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SALT LAKE CITY (AP) — Two Utah mortgage lenders will pay a total of nearly $10 million to settle allegations that they approved borrowers without documenting information like income and credit history.
The U.S. Department of Justice said Monday that the Salt Lake City-based companies wrongly approved federally backed low-down-payment FHA loans for borrowers who later defaulted, costing public money.
Prosecutors say the companies failed to document borrowers' income to qualify for the loan, analyze delinquent credit history, or take into account that a borrower was already behind on another mortgage.
Prosecutors say Primary Residential Mortgage Inc. has agreed to pay $5 million and SecurityNational Mortgage Company will pay $4.25 million to settle the allegations.
Primary says it's pleased the settlement will avoid litigation, but it doesn't admit liability.
SecurityNational was not immediately available for comment.
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