Buffalo's largest bank has agreed to pay $64 million to the federal government to settle allegations that it underwrote mortgage loans insured by the U.S. Department of Housing and Urban Development's Federal Housing Administration that did not meet requirements.
The case began when a former employee of M&T blew the whistle on the Buffalo-based bank.
Under the settlement, M&T admits to certifying for FHA insurance mortgage loans that did not meet HUD underwriting requirements. M&T also did not review all Early Payment Default loans. EPD loans are loans that become 60 days past due within the first six months of repayment.
"Mortgage lenders that fail to follow FHA program rules put taxpayer funds at risk and increase the chances of borrowers losing their homes," said Principal Deputy Assistant Attorney General Benjamin Mizer. "We will continue to hold lenders accountable for knowingly submitting ineligible loans for FHA insurance."