The Department of Justice on Thursday sued Quicken Loans Inc., alleging the mortgage lender lied to the government when making loans backed by the Federal Housing Administration.
The Justice Department said that between September 2007 and December 2011 Quicken originated hundreds of FHA-insured loans that shouldn’t have been eligible for federal backing.
Among other allegations, the complaint said Quicken pushed back on appraisals when a home received too low a valuation to qualify for a loan and that Quicken’s own management team was concerned about some of its loan-underwriting practices.
“Quicken issued hundreds of defective mortgage loans, and left (the Department of Housing and Urban Development) — and the taxpayer — to pay for the loans that defaulted,” said Colorado’s U.S. attorney, John Walsh, whose office helped lead the investigation.
The Justice Department complaint comes less than a week after Quicken filed a pre-emptive lawsuit against the department and the U.S. Department of Housing and Urban Development, alleging the government had attempted to twist its arm into admitting to claims of fraud that Quicken executives say it didn’t commit.
