American Financing Corp. ordered to pay up for firing mortgage fraud whistleblower

Four employees sued Colorado mortgage company after they were fired

Colorado-based American Financing Corp. was ordered to pay up after four of the mortgage company’s former employees claimed that the company fired them for trying to blow the whistle on widespread mortgage fraud taking place at the company.

Last year, the four former employees sued American Financing, claiming that they tried to warn their supervisors about fraudulent activities they’d uncovered at the company.

The lawsuit claimed that the company was using falsified documents and withholding unfavorable financial information on behalf of clients to originate mortgages that would not have been approved otherwise.

The lawsuit claimed that the company defrauded JPMorgan ChaseWells Fargo, Flagstar Bank, and others.

The case made its way through the Colorado court system, and earlier this week, a jury awarded $37,000 to one of the former employees for the company’s actions, according to a report from the Denver Post. The other three employees had their claims denied.

From the Denver Post report:

The jury decision in favor of mortgage consultant Sandra Reynolds came Wednesday afternoon in Arapahoe County District Court where Reynolds and three co-workers had filed wrongful termination lawsuits, plaintiff’s attorney Jack Olsen said. Olsen declined further comment about the verdicts.

The jury agreed with Reynolds’ claim that AFC fired her because she reported the allegation of mortgage loan application fraud to company management. In Colorado, whistleblowers are protected from retaliation.

The article states that the company has not been formally accused or sanctioned by any regulatory body for its alleged mortgage fraud.

The company, in a statement published by the Denver Post, said that it is looking forward to seeing the case through.

From the Denver Post again:

In an emailed statement, a representative from American Financing said, “American Financing Corp., is pleased to have reached this stage in the case. We defended our actions successfully with respect to three of four plaintiffs.  The jury disagreed with our personnel decision as to the fourth plaintiff. We respects the jury’s decision, but do not agree that any of our human resources decisions were incorrect. As the case is still pending, further comment would be inappropriate.”

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