Comfort Friddle never set out to become a whistleblower.
When the young mother with the unusual name went to work as a loan processor at Home America Mortgage in 2004, she expected the job to be like her previous stints at banks, where she spent years in a suit-and-tie culture, meticulously combing through applicants’ paperwork to make sure they were qualified for the loans that the banks were offering.
Instead, Friddle found herself in the middle of a “teenagery-kinda-party atmosphere,” where the CEO rode his 10-speed down the hallways of the mortgage retailer in Lawrenceville, Ga.
It’s also where, she said, guidelines were thrown out the window, and loans sailed out the door.
Today, the mother of three is the driving force behind a settlement the Department of Justice just brokered with Home America Mortgage, and its parent company Taylor, Bean and Whitaker. The two companies have agreed to pay the U.S. government $320 million for an alleged fraud that centered around bilking the Housing and Urban Development’s FHA Mortgage program, a program designed to encourage home ownership.
According to the settlement, Friddle alleged that Home America Mortgage and its parent company "knowingly engaged in a pattern of fraudulent activity and business practices, including falsifying and manufacturing loan documents, disregarding HUD regulations, and ignoring the absence of necessary documentation to obtain financing for FHA-insured loans."
However, Home America Mortgage has not been found guilty of fraud in a court of law.
In an exclusive interview with America Tonight’s Sheila MacVicar, Friddle provided an insider's look into the kind of misbehavior that was rampant among many banks and mortgage brokers before the housing crisis. That behavior, in this instance alone, allegedly cost U.S. taxpayers hundreds of millions of dollars.
“They ignored guidelines,” Friddle said. “I had even seen a couple of the girls making up documentation at a copier. And whiting out stuff and making copies and putting it in the file, which is insane.”
Friddle said she saw 21-year-old bank tellers, who claimed they made a whopping $30,000 a month, all qualify for loans.
From documents being created wholesale to backdating existing documents, Julie Bracker, Friddle’s lawyer described the environment as “so Wild West that eventually [Friddle] had reached the point where she thought, ‘This is just crazy.’”
Closing ‘Any Loan’
In its heyday, Home America Mortgage closed hundreds of loans every month, fueling a building boom on the outskirts of Atlanta and across the Southeast based on its reputation with builders and developers that they could “get any loan into closing.”
CEO Greg Hicks was profiting as well. According to a recent deposition of Hicks by Bracker, he acquired a share of a private jet, multiple automobiles, a mansion in a gated community and a majority interest in an Atlanta nightclub. Friddle said Hicks “used Home America as his own personal piggy bank.”
Another whistleblower submitted that Hicks was personally involved in the alleged fraud. Friddle said that Hicks, Friddle “often ordered myself to approve bad loans” and “told me that if I did not approve these loans ... I would be fired.”
Hicks declined a request for an interview through his attorney, who said he is not under criminal investigation and that he “denies any involvement in any wrongdoing.”
Blowing the Whistle
By 2006, Friddle decided she had seen enough and contacted lawyer Julie Bracker, whose firm in Roswell, Ga., specializes in what are known as Qui Tam lawsuits, which allow private citizens to sue those who have committed fraud against the government. To incentivize whistleblowers to come forward, the law guarantees them a percentage of any money recovered.
Friddle and another former employee filed a lawsuit in 2007 against Home America Mortgage. Then, officials from the Department of Justice, FBI, the U.S. Attorney’s Office for the Northern District of Georgia, FHA and Freddie Mac came to interview her. She said she told them everything. And then, she waited.
In 2009, Taylor, Bean and Whitaker, the parent company, was raided by the FBI on an unrelated matter. Soon thereafter, TBW and Home America Mortgage were shuttered.
“I have no idea why no one thought, ‘Hey, we need to probably look in on this company and see what's happening,’” Friddle told MacVicar, adding that there was no oversight on the company’s handlings.
“The claim had been there the whole time. The numbers and the claim never changed from the very beginning. So, basically they were allowed to do business for two years.”
The final insult is that with Home America Mortgage in bankruptcy, any money that is recoverable will be pennies on the dollar – meaning Friddle, and the other whistleblower, will earn next to nothing. But for Friddle, that’s OK.
“I've been doing this for seven years, so it has absolutely nothing to do with any money,” she said.
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