Final Civil Action: Pacific Horizon Bancorp, Inc., and Two Loan Officers Settled Allegations of Failing To Comply With HUD’s Federal Housing Administration Loan Requirements

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted HUD’s Office of Program Enforcement in a civil investigation of Pacific Horizon Bancorp, Inc., and two former loan officers at Pacific Horizon. Pacific Horizon has its principal place of business in La Crescenta, CA. Based on OIG’s civil investigation, on April 2, 2019, HUD notified Pacific Horizon and the two loan officers that it believed they were liable under the Program Fraud Civil Remedies Act of 1986 for violating HUD requirements in connection with four FHA-insured loans for Pacific Horizon and two FHA-insured loans for the loan officers. To avoid the time and expense of further administrative proceedings and to reach a satisfactory resolution of the matter, all of the involved parties entered into settlement agreements. The agreements did not constitute an admission of liability or fault on the part of any party. On July 1, 2019, Pacific Horizon entered into an agreement to pay $325,000 plus accrued interest to HUD. On July 11, 2019, the two loan officers entered into an agreement and collectively agreed to pay a total amount of $15,000 to HUD.