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Quicken Loans sued by United States over federally insured mortgages

By Shaun Zinck | May 13, 2015

| Shutterstock

The United States has filed a lawsuit against Quicken Loans for allegedly filing false claims over federally backed mortgages.

The suit was filed in the District Court of Washington, D.C. on April 23 against the Michigan-based lender, claiming the company made the false claims on loans endorsed by the Federal Housing Administration insurance between September 2007 and December 2011.

The lawsuit said Quicken approved loans that violated FHA rules and filed false certifying compliance.

“Quicken’s conduct allowed it to profit from these loans, even if the borrowers defaulted on their mortgages, while placing all the risk on FHA—a risk that ultimately materialized into millions of dollars of losses to (the United States Housing and Urban Development),” the suit said.

The suit also alleges Quicken asked for inflated appraisals and pressured underwriters to approve loans faster in order to meet FHA requirements. Additionally, Quicken paid illegal commissions to underwriters who approved the loans.

“Quicken established a culture that valued getting a loan approved and endorsed for FHA insurance over complying with FHA’s rules,” the suit said.

The United States is represented by Benjamin C. Mizer, principal deputy assistant attorney general, Vincent H. Cohen, acting United States attorney, Daniel F. Van Horn, chief of civil division at U.S. Attorney's Office, and Brian P. Hudak, assistant United States attorney.

United States District Court for the District of Columbia case number 1:15-cv-00613.

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