The mortgage giant calls the government’s lawsuit "a fishing expedition" but agrees to settlement
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Quicken Loans has agreed to pay $32.5 million to resolve a federal probe accusing it of fraud.
The Department of Justice sued Quicken Loans under the False Claims Act in 2015, accusing the lender of knowingly submitting loans to the Federal Housing Administration that weren’t up to FHA standards. The case dragged on for years, with Quicken Loans insisting it had done nothing wrong.
In the settlement, Quicken made no admission of wrongdoing, according to a report by The Detroit Free Press. The lender will also continue to participate in the FHA loan program. Bill Emerson, vice chairman of Quicken Loans, continued to insist that the company had not violated the False Claims Act, but agreed to resolve cases in which mistakes were made.
“Resolution is the right term, not settlement,” Emerson told the Free Press. “…We had done nothing wrong. Their claims were not supported.”
Emerson told the Free Press that Quicken will pay $25.5 million to the government for losses incurred when mistakes involving “human error” were made. The company will also pay $7 million in interest. He said that the DOJ had originally sought a much higher settlement amount, around $200 million.
Emerson told the Free Press that the loans involving “human error” for which Quicken is settling account for a 0.02% error rate on $108 billion in FHA-backed mortgages over the last 12 years. He also slammed the DOJ’s lawsuit as frivolous.
“We did exactly what we said we would do from the beginning,” he said. “At the end of the day, I think this was a fishing expedition from a previous DOJ.”
Quicken Loans is the nation’s largest FHA lender. Emerson told the Free Press that the company has also had the FHA’s lowest delinquency and default rates for years.
