U.S. Justice Department Sues Quicken Loans

LND,

Quicken, the Detroit-based lender was sued by The Justice Department. It was alleged that the lender violated mortgage underwriting rules as well as neglected the ‘red flags’ on dicey home loans. This has cost the federal government a million of dollars on FHA-insured mortgage. A 66-page of the lawsuit was filed on Thursday in Washington, D.C. The lawsuit stated that the government claims that from September 2007 through December 2011, the online mortgage giant knowingly submitted claims for hundreds of improperly underwritten FHA-insured loans. These loans involved important credits such as inflated appraisals, poor credit risks and borrowers who has insufficient incomes.

The government also alleges that Quicken also failed its obligation to disclose problems with the loans to the FHA.

Last Friday in a pre-emptive strike, Quicken filed a lawsuit in U.S. District Court in Detroit against the government, seeking to quash the three-year government investigation.  Quicken President Jay Farner denied the allegations after a few hours of filing the lawsuit. He said that the lawsuit was the pressure tactic to get Quicken to settle and pay the substantial fine, which the company refuses to do. He refused to specify the amount, but just said that it was not a small amount.

Farner said, “We were focused on doing the right thing. We would absolutely, positively not do a loan unless the income was accurate.”

Quicken said in a written statement released on T… MORE

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