Quicken Loans, the nation's top online lender and second largest retail mortgage lender in America, as described on its website, is now facing a legal battle again, reports Housing Wire.
This time, the company, which is the largest mortgage lender of the Federal Housing Administration (FHA), is suing the U.S. Department of Justice (DOJ) and the Department of Housing and Urban Development (HUD). The DOJ is reportedly asking the lender to pay hefty fees and is allegedly demanding the company to make false admissions.
"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. No threat, including high-profile senseless lawsuits from powerful federal officials, will deter our company and its leadership from doing the right thing. We will stand in defense of our impeccable reputation established by thousands of hard-working ethical team members over our 30-year history," Quicken Loans CEO Bill Emerson said in the company's official statement.
Quicken Loans has faced lawsuits from borrowers and even ex-employees in the past, as reported in 2011 by Public Integrity. The website notes that these lawsuits accused Quicken Loans of "using high-pressure salesmanship to target elderly and vulnerable homeowners," and "mislead borrowers about their loans." Moreover, the company was accused of "falsifying property appraisals and other information to push through bad deals," notes the website. Public Integrity also mentioned the statement of a former loan salesman, Michael Pikora, who said that the company managers allegedly encouraged them to raise their commissions by "locking the customer into a higher interest rate, even if they qualified for a lower rate, and rolling hidden fees into the loan."
Housing Wire notes that Quicken Loans had submitted over 85,000 documents which included 55,000 correspondence via emails to the DOJ. Aside from that, members of the company had been subjected to hundreds of hours of DOJ's deposition as part of its inquiry.
"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 added.