Allied Home Mortgage Corporation is the latest lender to face government action for its housing boom activities.

Allied Home Mortgage Corporation and its CEO James Hodge were suspended today for fraudulent lending practices that cost the government hundreds of millions of dollars.

The U.S. Department of Housing and Urban Development (HUD) is considering debarring Hodge and Allied’s executive vice president, Jeanne Stell. Until a decision is reached, the suspension stops the company from issuing new FHA-insured mortgages.

Allied is accused of violating numerous HUD/FHA requirements, most significantly originating loans from non-FHA-approved branches and knowingly submitting false information to HUD about the loans’ origins.

According to an Associated Press report, “nearly 32 percent of the 112,324 home loans originated by Allied between Jan. 1, 2001, and the end of 2010 have defaulted, resulting in more than $834 million in insurance claims paid by HUD.”

“We will not tolerate mortgage lenders who play fast and loose with FHA’s standards,” said HUD’s general counsel, Helen Kanovsky. “These defendants demonstrated a pattern of recklessness and utter disregard for how we do business. They’ve harmed FHA, hurt homeowners, and now they’ll be held to account for their actions.”

The Houston-based company also failed to pay the operating expenses of FHA-approved branch offices, leaving branch managers to fend for themselves, and did not implement a quality control plan, allowing their corrupt business practices to continue uninvestigated.

The Government National Mortgage Association (Ginnie Mae) has also suspended Allied from issuing securities in its Mortgage-Backed Securities program.

U.S. Attorney Preet Bharara said at a news conference, “If and when we have sufficient evidence for a criminal case, we’ll bring it.”