Six whistleblowers who revealed fraudulent foreclosure schemes by banks will rcollect $46.5 million according to the Department of Justice. The five mortage lenders, Bank of America, Wells Fargo, J.P. Morgan, Citigroup and Ally Financial agreed to pay $5 billion in fines and $20 more in refinancing and mortgage modifications. The whistleblower suits stem from a law called The False Claims Act, which allows private citizens to file lawsuits on behalf of Uncle Sam and collect a portion of any penalties and recovery in the case. The whistleblowers revealed that some banks were using fraudulent documents in foreclosures and were submitting insurance claims to the Federal Housing Administration. The FHA is a self funded government agency that offers insurance on qualifying mortgages to encourage home ownership. In the case of default, the FHA pays out a claim to the lender. One whistleblower, Kyle Lagow, who worked as a home appraiser in Texasfor LandSafe a subsidiary of Countrywide Financial, said the company inflated home appraisals in order to collect higher claims from the FHA. Jeffrey Newman represents whistleblowers. He can be reached at 617-823-3217.