On May 8, the U.S. District Court for the Southern District of New York dismissed claims for damages and civil penalties under the False Claims Act (FCA) brought by the federal government against a mortgage lender alleged to have sold defective loans to Freddie Mac and Fannie Mae while representing that the loans complied with the enterprises’ requirements. U.S. v. Countrywide Fin. Corp., No. 12-1422, Order (S.D.N.Y. May 8, 2013). The government also claims that (i) the lender’s senior management ignored warnings about the supposedly high levels of fraud and defects, (ii) the lender attempted to conceal internal quality control reports indicating that the loans had high material defect rates, and misleadingly informed Fannie Mae and Freddie Mac that it had tightened its underwriting guidelines, and (iii) the lender resisted buying many of the loans back after the loans defaulted. Notably, the court did not dismiss the government’s claims under FIRREA, which has a longer statute of limitations and lower burden of proof than the FCA. The court expects to release a written opinion in the near future.