The U.S. Justice Department sued Quicken Loans on Thursday alleging the Detroit mortgage lending giant had improperly originated and underwrote mortgages insured by the Federal Housing Administration.
The complaint, filed in the U.S. District Court in Washington, D.C., 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.
The government is claiming that Quicken encouraged its employees to disregard FHA rules and falsely certify compliance with underwriting requirements in order to reap the profits from FHA-insured mortgages.
For example, the government’s complaint states that when Quicken received an appraised value for a home that was too low to approve a loan, Quicken often requested a specific new and higher value from the appraiser with no justification for the increase. That practice is prohibited by FHA rules.
Jay Farner, president and […]
Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM) will pay a combined $35.7 million to settle a U.S. regulator’s allegations that their loan officers took illegal kickbacks for steering customers to a now-defunct title company.
More than 100 loan officers at Wells Fargo and six at JPMorgan accepted the improper rewards, which mostly consisted of marketing services and leads on homeowners that might want to refinance their mortgages, the Consumer Financial Protection Bureau said in a settlement filed today. One former Wells Fargo loan officer was accused of accepting cash payments from the company, Genuine Title LLC, that he tried to hide by directing them through his wife, the regulator said.
Wells Fargo agreed to pay $24 million in fines and $10.8 million to compensate customers, while JPMorgan’s payments total $900,000. Neither bank admitted or denied the allegations, which were […]
Standard & Poor’s (MHFI)’ chances of settling the government’s lawsuit over mortgage-bond ratings for less than $1 billion may have slipped away after Bank of America Corp.’s Countrywide unit was socked with a $1.3 billion fine.
The Countrywide ruling was the first to lay out what penalties financial institutions could face under a 1989 bank-fraud law the Obama administration is using against alleged culprits of the subprime mortgage crisis. It has strengthened the government’s hand against McGraw Hill Financial Inc.’s S&P, said Peter Henning, a law professor at Wayne State University.
“If the starting negotiation point for the Justice Department to settle was $1 billion before, that number has just gone up,” Henning said in a phone interview.
The U.S. sued S&P and Countrywide under the Financial Institutions Reform, Recovery and Enforcement Act, or Firrea, a law […]
Community bankers are launching a last-ditch effort to push the Senate this year to pass more than a dozen bipartisan regulatory relief bills that have already cleared the House with support from both parties.
Though the bills are considered relatively narrow, uncontroversial fixes, the Senate has not acted upon them, frustrating many in the industry. Some are hoping to use a Senate Banking Committee hearing on community bank issues scheduled for Sept. 16 to jumpstart the process.
“It’s disappointing to see the lack of attention being paid, by all accounts, to technical fixes and minor changes that can provide some relief to community banks,” said James Ballentine, executive vice president of congressional relations and political affairs at the American Bankers Association.
The legislation in question may be small in scope, but it would provide a significant benefit for community banks, supporters say.
For example, the House passed a […]