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M&T Bank

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M&T Bank Settles for $64 Million Over False Claims Act Violations Related to FHA Loans

M&T Bank has agreed to pay $64 million to resolve allegations of violating the False Claims Act by knowingly originating and underwriting mortgage loans insured by the Federal Housing Administration (FHA) that did not comply with applicable requirements. The settlement addresses claims that between January 2006 and December 2011, M&T Bank certified numerous loans for FHA insurance that failed to meet HUD's underwriting standards, resulting in substantial losses for the government when these loans defaulted. The case arose from a whistleblower lawsuit filed by a former employee, highlighting the importance of adherence to FHA program rules.

Key Legal Principles:

1. False Claims Act Liability: The case underscores the liability under the False Claims Act for knowingly submitting false information to obtain government funds.

2. Importance of Compliance: Lenders must adhere strictly to FHA underwriting standards to avoid significant financial penalties and protect taxpayer interests.

3. Whistleblower Protections: The case illustrates the role of whistleblowers in exposing corporate misconduct and facilitating government recovery efforts.

Conclusion: This settlement serves as a critical reminder for financial institutions about the consequences of failing to comply with federal lending regulations and emphasizes the value of whistleblower contributions in holding entities accountable.

Citation: U.S. ex rel. Kelschenbach v. M&T Bank Corp, 13-CV-0280(S) (W.D.N.Y.)

M&T Bank Settles Class Action for $3.325 Million Over Alleged Unlawful Mortgage Fees

A class action lawsuit has resulted in a $3.325 million settlement concerning allegations that borrowers were charged unlawful "pay-to-pay" fees to make mortgage payments to M&T Bank. The lawsuit claimed these fees violated the Fair Debt Collection Practices Act and the Rosenthal Fair Debt Collection Practices Act, as well as breached the terms of the borrowers' loan agreements. All borrowers who had a residential mortgage loan serviced by M&T Bank and incurred these fees between August 9, 2015, and May 6, 2021, are eligible for compensation. Payments will be allocated on a loan-by-loan basis without requiring proof of purchase.

Key Legal Principles:

1. False Claims Act Violations: The case highlights the legal implications of charging fees that may violate consumer protection laws.

2. Consumer Rights Protection: The settlement reinforces the importance of compliance with the Fair Debt Collection Practices Act and similar regulations.

3. Class Action Mechanism: This case illustrates how collective legal action can provide recourse for individuals against large financial institutions.

Conclusion: This settlement serves as a significant reminder for financial institutions to adhere to consumer protection laws and demonstrates the effectiveness of class action lawsuits in addressing widespread issues of unlawful practices.

Citation: Silveira v. M&T Bank, Case No. 2:19-cv-06958-ODW-KS (C.D. Cal.).

Mailing Address* to M&T's Legal Processing Department:

M&T Bank
Legal Order Processing
P.O. Box 844
Buffalo, NY 14240-0844

M&T Bank
Legal Order Processing
626 Commerce Drive
Amherst, NY 14228

*The information provided is for informational purposes only and may be outdated or inaccurate. While efforts are made to keep information current, we do not guarantee the accuracy, completeness, or timeliness of any information presented. This information is sourced from public records as of November 29, 2024. Please verify any critical information independently before taking action.