Finding itself in one of the largest mortgage fraud cases ever prosecuted by the federal government, the Department of Housing and Urban Development may have a hard time explaining why it failed to act earlier against a lender that scammed the FHA for nearly a decade. It appears HUD, notwithstanding its assertions of increased vigilance and aggressive enforcement against violators of department regulations, dropped the ball on Allied Home Mortgage Corp. According to a lawsuit filed by the U.S. Attorney in Manhattan district court this week, Allied, an FHA loan correspondent, and its two top executives engaged in ...