BUFFALO -- M&T Bank will pay the federal government $64 million to settle a lawsuit that centered on how the company issued housing loans.
In 2013, a former M&T underwriter Keisha Kelschenbach filed a whistleblower lawsuit against her former employer saying that she saw fraud in the bank's Federal Housing Administration underwriting. Her lawsuit prompted a U.S. Department of Justice investigation. From that investigation, the department found M&T had awarded loans that did not meet federal requirements.
"Mortgage lenders that fail to follow FHA program rules put taxpayer funds at risk and increase the chances of borrowers losing their homes," the justice department's Benjamin Mizer said in a statement Friday.
M&T has more than 800 branches and roughly $125 billion in assets. The Buffalo-based bank with about 30 local branches and 450 employees said in a statement that the settlement won't affect bank branches.