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 […]