Even after the lender’s lawsuit against the government was dismissed in December, Quicken Loans is still not going to back down from its fight against what it says is an “absurd” case against its lending practices.
CEO Bill Emerson told CNBC’s “Squawk Box” this week that Detroit-based mortgage lender won’t settle with the government over its fraud allegations.
The Department of Justice accused Quicken Loans of submitting or causing the submission of claims for hundreds of improperly underwritten loans insured by the Federal Housing Administration from September 2007 to December 2011. According to the DOJ’s lawsuit, the U.S. Housing and Urban Development (HUD) agency lost “millions of dollars” because Quicken Loans violated underwriting rules. In particular, the complaint stated that since 2007 HUD has paid more than $500 million in claims on almost 4,000 mortgages “endorsed by Quicken.”
Last April, Quicken Loans sued the DOJ and HUD to prohibit the government from using what it called a flawed sample of loans to build a case against the lender. Quicken Loans’ suit in federal court, which included a demand for a jury trial in Michigan, was dismissed in December.
“For us, that’s not something we can even begin to stomach,” Emerson said on the show. Emerson added that he welcomes a jury trial.
Although many lenders in similar positions have settled with the government, Quicken Loans maintains that it will not. “The case is absurd,” Emerson said in a previous interview. “We’re going to continue to fight it.”
“The largest, most well-capitalized lenders in the country have been systematically targeted by the DOJ. And they go in and take a look and threaten and they shame ... and try to put pressure on people to settle,” Emerson said.
Though he said his team made small mistakes in some lending situations, he adamantly denied any type of fraud.
“An example, we miscalculated income by $2.10. We over-lent somebody $26 on a loan program. Those are the type of things the Department of Justice is saying is committing fraud against the United States government. And it’s just dead wrong,” he said.
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