MetLife will pay $123.5M to end federal investigation into its mortgage practices

Associated Press

MetLife's home lending unit will pay $123.5 million to end an investigation into allegations it gave government-backed mortgages to people who didn't meet federal requirements.

The Justice Department said Wednesday that the mortgages were insured by the Federal Housing Authority. It says MetLife knew many of the loans didn't meet federal requirements but it rarely informed the FHA about the problem. According to the agency, during some periods in 2009 and 2010 MetLife Bank knew that a majority of the loans it was originating had material or significant deficiencies.

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It says the FHA and taxpayers were stuck with the bill when defaults followed.

The New York company says it cooperated with the investigation and set aside money for the settlement. It exited the business in 2012.