Worse than that, the DOJ appears to be basing their entire case on a handful of out-of-context email conversations skimmed from the communication between Quicken Loans employees. The complaint filed today is riddled with inaccurate and twisted conclusions from fragments of a handful of emails cherry-picked from 85,000 documents that the DOJ subpoenaed.
Today’s DOJ filing is simply the continuation of the abusive actions and a make-good on the DOJ’s threats since their witch-hunt began three years ago, as detailed in the lawsuit Quicken Loans filed against the DOJ last week. The FHA mortgages Quicken Loans originated are projected to generate billions in profits (net of claims) for the government from the insurance premiums on the $40 billion in FHA volume the company has closed since 2007. By its own objective public reporting, FHA ranks Quicken Loans the highest quality (lowest default rate) lender of any large FHA originator in the United States. Quicken Loans is the FHA’s largest lender. In a statement of response, Quicken said that the government’s lawsuit is “riddled with inaccurate and twisted conclusions” that were pulled from a “handful of emails cherry-picked from 85,000 documents” that Quicken provided to the DOJ. “In particular, according to the government's complaint, despite its obligation to report to HUD all materially deficient loans, during the period from September 2007 to December 2011, Quicken concealed its deficient underwriting practices and failed to report a single underwriting deficiency to the agency.” “The complaint further alleges that Quicken failed to implement an adequate quality control program to identify deficient loans, and that Quicken failed to report to HUD the loans it did identify,” the DOJ said. The government’s complaint alleges that Quicken instituted and encouraged an underwriting process that led to employees disregarding FHA rules and falsely certifying compliance with underwriting requirements in order to reap the profits from FHA-insured mortgages. Additionally, a DEL must certify that every loan endorsed for FHA insurance is underwritten according to the applicable FHA standards.Īccording to the DOJ, Quicken did not adhere to those standards. HUD said that it relies on DELs to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance. Under the DEL program, neither the FHA nor HUD reviews the underwriting of a loan before it is endorsed for FHA insurance, the DOJ said. District Court for the District of Columbia.Īccording to the DOJ, Quicken was a direct endorsement lender with the FHA, which gave Quicken the authority to originate, underwrite and certify mortgages for FHA insurance. Now, the government has indeed taken legal action, suing the Detroit-based lender in the U.S. The government’s lawsuit comes days after Quicken sued the DOJ and the Department of Housing and Urban Development, saying that it was left with no alternative but to take this action after the DOJ demanded Quicken Loans make public admissions that were blatantly false, as well as pay an inexplicable penalty or face legal action. The United States government is suing Quicken Loans, accusing the lender of improperly originating and underwriting loans that were insured by the Federal Housing Administration.Īccording to an announcement from the Department of Justice, the government alleges that from September 2007 through December 2011, Quicken “knowingly submitted, or caused the submission of, claims for hundreds of improperly underwritten FHA-insured loans.”
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