The federal government is encouraging anyone who witnesses government fraud to step forward to help save the taxpayers money.

There are various types of government fraud that can be reported by the employee, who becomes a whistleblower, but any individual may qualify if the reported act involves illegally claiming money from the government.

Whistleblowers are the key witnesses in these cases and are vital individuals when there are reports of defrauding the government.

Also called relators, whistleblowers can be employees, former employees, competitors, or contractors of the company who can report their employer for this misconduct that allowed the company to improperly collect government funds.

Government fraud can involve military contracts, federal healthcare programs like Medicare and Medicaid and mortgage underwriting fraud.

Mortgage Underwriting Fraud

Mortgage underwriting is a federal process the lender must go through when determining what mortgage loan to offer the borrower. The defining factors that underwriters consider are: credit scores, type of employment, and collateral damage assessment. In wake of the housing crisis of 2008, mortgage fraud has become a prevalent issue to the government based on the country’s fluctuating housing market.

Mortgage fraud is defined as “any material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan.” Mortgage underwriting fraud for government-backed loans are harmful to both borrowers and lenders, as the entirety of the fraud is a misrepresentation of personal financial information.

Just this month, the Department of Justice reached a settlement with Wells Fargo who was accused of certifying loans for FHA insurance when they were not eligible, and did not disclose to HUD thousands of faulty loans. The bank admitted to the government fraud they had been accused of, and will pay $1.2 billion for their improper mortgage lending practices.

Whistleblowers who report mortgage underwriting fraud or other forms of misconduct resulting in government financial losses, are eligible for reward incentives and federal protections against potential backlash.

Overview of Whistleblower Protections

Under current whistleblower law, different protections can be provided to different categories of employees.

For example, contractors or federal government employees are protected by the Whistleblower Protection Enhancement Act (WPEA). Corporate whistleblower are offered coverage by the Sarbanes Oxley Act of 2002, with international organizations forming their own whistleblower protection act guidelines.

The more well known whistleblower law, the False Claims Act, provides protection against potential penalties the companies could inflict upon the employee. Established in the Civil War, this whistleblower protection act has been amended several times to keep up with current litigation issues.

Under current whistleblower law companies are prohibited from harassing or threatening whistleblowers in any way, with the identity of the whistleblower confidential until after the litigation.

It is important to note that whistleblower claims cannot be based on public information, and that the whistleblower must be the first to report the infractions. According to whistleblower law, these individuals will typically be rewarded between 15% to 30% of whatever settlement potentially recovered.

Reporting Mortgage Underwriting Fraud

If you have witnessed government fraud taking place in the form of mortgage underwriting fraud, you may be eligible to file a whistleblower lawsuit. A government fraud whistleblower attorney can review your case at no charge to help determine your eligibility to pursue legal action.