Quicken, HUD Settle Lawsuit
A federal mediator on Friday said HUD and Quicken Loans Inc., Detroit, settled an acrimonious lawsuit accusing Quicken of violating the False Claims Act.
The lawsuit, filed in 2015, alleged Quicken violated FCA through underwriting practices that disregarded FHA rules and improper appraisals that enabled Quicken to make larger mortgages that were insured by FHA, allowing Quicken to be reimbursed if the borrower defaulted.
Under the settlement, Quicken agreed to reimburse the government $32.5 million–including $25.5 million for “making the government whole for any losses it may have incurred;” and $7 million in interest.
In turn, Judge Mark Goldsmith dismissed the lawsuit with “prejudice and no findings against Quicken Loans.” Additionally, Quicken will continue to participate in the FHA program.
The mediator, retired Judge Gerald E. Rosen, issued a statement saying the resolution is “in the interests not only of the parties, but of the home-buying public.”
“All parties fully understand the important role the FHA program plays in helping middle-class Americans access home financing, and this resolution allows the parties to move ahead together with that mission and to ensure their future relationship,” Rosen wrote. “I commend the parties for investing the time and effort through this mediation, which will help support the continuation and the strengthening of the partnership between Quicken Loans and HUD in jointly serving American homeowners.”
HUD and Quicken also issued statements. “Today, HUD reached an important resolution with Quicken Loans so that, together, we may continue offering safe and sustainable mortgage financing to qualified, creditworthy borrowers,” said Amy Thompson, HUD’s Assistant Secretary for Public Affairs. “FHA relies on its partnerships with lenders, such as Quicken Loans, to advance home buying opportunities for Americans, and we look forward to continuing our relationship with Quicken Loans.”
“We have always been proud of our growing participation in the FHA program,” said Quicken Loans CEO Jay Farner.” Every day teachers, police officers, factory workers and so many others who are the backbone of our communities, utilize Quicken Loans for this very important loan program. Now that this dispute is behind us, we look forward to cultivating and expanding our relationship with both FHA and HUD so we can increase Americans’ access to home financing and home ownership.”