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Federal lawsuit escalates Quicken probe

Quicken quickly slams complaint as ‘irrational and baseless witchhunt’

A three-year battle between the U.S. Department of Justice (DOJ) and Quicken Loans came to a head yesterday when the department filed a lawsuit alleging the Detroit-based lender violated the False Claims Act by improperly originating and underwriting mortgages insured by the Federal Housing Administration (FHA). The lawsuit is the latest volley in a longstanding government probe of Quicken’s participation in the FHA insurance program as a direct endorsement lender. According to the DOJ, from 2007 to 2011, Quicken knowingly submitted claims for hundreds of improperly underwritten FHA-insured loans, encouraged employees to disregard FHA rules and requested inflated property appraisals. As a result of these alleged actions, the Department of Housing and Urban Development (HUD) paid “millions of dollars” of insurance claims, and many additional loans that have become at least 60 days delinquent could result in further HUD claims, the DOJ said. What’s more, the department c...

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