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Quicken Loans—the largest Federal Housing Administration (FHA) mortgage lender in the U.S.—sued the United States Department of Justice (DOJ) and Department of Housing and Urban Development (HUD) on Friday. Quicken Loans claims this was its only choice after the DOJ told the company it must publicly admit to information that was false, as well as pay a large sum of money, or it would have to face legal action.
Quicken Loans is currently ranked the highest quality and lowest default rate lender of any FHA originator in the U.S. The company has received the government agency’s best performing loan portfolio. FHA has documentation available for the public stating Quicken Loans continuously has the lowest compare ratio.
Because of Quicken Loans participation in FHA’s program, the government is expected to receive over $5.7 billion in “net profits from the insurance premiums collected above and beyond claims made from over $40 billion in FHA home loan volume closed by Quicken Loans during the 2007 -2013 timeframe, “ according to Housing Wire.
The FHA bestowed Quicken Loans with the highest quality ranking, leading to a great deal of profitability for FHA’s insurance program. This is in part because Quicken Loans has great focus and attention on quality control, as well as thousands of highly trained and qualified team members, technology, and more.
On many occasions, representatives from the FHA have gone to Quicken Loans to study the company’s underwriting processes and best-practices. They do this to get an idea of how Quicken Loans’ FHA lending has grown so well.
“After three years of struggling to understand the DOJ’s position and methodology that would warrant the country’s largest and highest quality FHA lender to make untrue admissions and pay an inexplicable penalty or face public legal action, it is time to ask the court to intervene,” said Quicken Loans CEO Bill Emerson.
Quicken Loans has given the DOJ over 85,000 documents and conducted a multitude of depositions from numerous Quicken Loans team members. Three years later, the DOJ analysis has resulted in a possible federal lawsuit due to insufficient analysis of a microscopic number of mortgages from the almost 250,000 FHA loans Quicken loans has closed since 2007, according to Housing Wire.
“It’s a shame the DOJ would choose to attack the country’s largest and highest quality FHA lender providing government lending for homebuyers and home owners across all 50 states at the very time our nation needs expanded access to credit for middle-class Americans who benefit most from the FHA program.
“The Constitution provides for checks and balances among the three branches of government. We are hopeful and confident that after examining the facts, the judicial branch will exercise their authority to provide just relief from this misuse of power,” Emerson concluded.