Quicken Loans Sues DOJ - Claims Victim of "Political Agenda"

[Malcove Magnesia]

The Feds have fired back at Quicken Loans with a lawsuit of their own.

[warsaw7]

So I'm "trolling" on DYes because I don't believe a company should be exempt from criminal or civil investigations due to its HQ address?

And the support given for this claim is "read some online comments, so there!".

I'm not sure if I've heard a more ridiculous claim on DYes, and that's saying something. I guess, at the least, it helps the more rational members of DYes better understand the mindset of some of our resident boosters.

No. The proof is in the pudding you troll on Detroit more than anyone on on here. So keep on trolling. And before you criticize my post why don't you read the comments on their smart ass?

[BankruptcyGuy]

The "other criminals didn't get convicted, therefore our homegrown criminals shouldn't either" argument is entirely unconvincing.

And the premise is wrong. DOJ has been very tough in terms of criminal and civil penalites. Deutsche Bank was fined nearly $3 billion just yesterday. Every major financial institution in the U.S. has been impacted.

For you, maybe. Some of us believe in "innocent until proven guilty" not "innocent until indicted."

Here's my problem with the approach: of the actors in this mess

borrowers, who borrowed through
mortgage brokers, who sold to
lenders like QL, who bundled loans to
Fannie or Freddie, who sold bonds through
Wall Street i-banks, who sold them to
investors

Only the lenders are being held culpable. It is completely reasonable to wonder why all the other actors have been let off the hook, and some even received bailouts.

[Gannon]

This was forwarded by Steve Neavling of MotorCityMuckraker:

http://mfi-miami.com/2015/04/us-doj-...se-claims-act/


The first few lines are chilling, and encapsulate the scope of this move by the Feds. It could immediately kill 50% of Quicken's revenue stream.

[Hermod]

For you, maybe. Some of us believe in "innocent until proven guilty" not "innocent until indicted."

Here's my problem with the approach: of the actors in this mess

borrowers, who borrowed through
mortgage brokers, who sold to
lenders like QL, who bundled loans to
Fannie or Freddie, who sold bonds through
Wall Street i-banks, who sold them to
investors

Only the lenders are being held culpable. It is completely reasonable to wonder why all the other actors have been let off the hook, and some even received bailouts.

I was under the impression that other than AIG [[who insured the mortgage tranches) the financial institutions that received bailouts have all paid the government back with interest. Some of the banks were forced to take bailouts even if they didn't need them to avoid prejudicing public opinion against the banks that needed bailouts.

[hortonz]

That's one possibility. Another would be that someone within the DOJ wants to make a name for himself so he's going after big banks\lenders and making them pay.

I hope Quicken's claims are true and that they're innocent. This should be interesting to watch play out in court.

It's funny how Obama's DOJ saw fit to prosecute Quicken Loans, a mere piker compared to all the big Wall Street banks and financial institutions, while avoiding going after the "too big to fail" lenders, who are continuing to commit fraud and fleece the American public on the taxpayers' dime.

[mwilbert]

It's funny how Obama's DOJ saw fit to prosecute Quicken Loans, a mere piker compared to all the big Wall Street banks and financial institutions, while avoiding going after the "too big to fail" lenders, who are continuing to commit fraud and fleece the American public on the taxpayers' dime.

I think they are actually doing basically the same thing in both cases--pursuing large settlements. You haven't noticed the multiple billions of dollars they have gotten from pretty much all the large banks? It is true, and probably unfortunate, that there haven't been any criminal convictions of banks, but that isn't going to be any different for Quicken. Bham mentioned this already, but since you posted afterward, I thought I would reiterate.

[mwilbert]

For you, maybe. Some of us believe in "innocent until proven guilty" not "innocent until indicted."

Here's my problem with the approach: of the actors in this mess

borrowers, who borrowed through
mortgage brokers, who sold to
lenders like QL, who bundled loans to
Fannie or Freddie, who sold bonds through
Wall Street i-banks, who sold them to
investors

Only the lenders are being held culpable. It is completely reasonable to wonder why all the other actors have been let off the hook, and some even received bailouts.

The results don't look to be me like "being let off the hook". Fannie and Freddie are in conservatorship, and their shareholders will probably be wiped out [[although there are hedge funds trying to prevent that. The banks' shareholders, in addition to being forced to pay very large fines, have also in general had the value of their shareholdings cut quite substantially. The investors in the bad securitized loans lost a lot of money, and it isn't clear how they did anything wrong anyway. The borrowers [[at least toward the end) did rather badly. The only people who didn't really get hit were the mortgage brokers, because they didn't hold on to any of the paper. It actually makes sense to penalize them more than the others. And since in the transaction between residential mortgage lender and borrower, the lender is the professional, I think it is appropriate to assign more fault to them. The buyers didn't invent NINJA loans, and they weren't the ones who didn't bother checking whether the representations made to them were even vaguely plausible. Whether is morally correct or not, it is easier to go after one broker/lender than tens of thousands of customers. If the banks want to go after the borrowers for fraud they should, but in general they don't because they know they aren't going to recover anything.

Also, you are missing two of the biggest culprits in the whole thing: the non-Freddie/Fannie securitizers, who were actually much more aggressive in packaging low-quality loans than Fannie/Freddie, and the rating agencies, without whose completely bogus ratings the lower tranches of the securitized mortgages would have been unsaleable.

[BankruptcyGuy]

The results don't look to be me like "being let off the hook". Fannie and Freddie are in conservatorship, and their shareholders will probably be wiped out [[although there are hedge funds trying to prevent that. The banks' shareholders, in addition to being forced to pay very large fines, have also in general had the value of their shareholdings cut quite substantially. The investors in the bad securitized loans lost a lot of money, and it isn't clear how they did anything wrong anyway. The borrowers [[at least toward the end) did rather badly. The only people who didn't really get hit were the mortgage brokers, because they didn't hold on to any of the paper. It actually makes sense to penalize them more than the others. And since in the transaction between residential mortgage lender and borrower, the lender is the professional, I think it is appropriate to assign more fault to them. The buyers didn't invent NINJA loans, and they weren't the ones who didn't bother checking whether the representations made to them were even vaguely plausible. Whether is morally correct or not, it is easier to go after one broker/lender than tens of thousands of customers. If the banks want to go after the borrowers for fraud they should, but in general they don't because they know they aren't going to recover anything.

Also, you are missing two of the biggest culprits in the whole thing: the non-Freddie/Fannie securitizers, who were actually much more aggressive in packaging low-quality loans than Fannie/Freddie, and the rating agencies, without whose completely bogus ratings the lower tranches of the securitized mortgages would have been unsaleable.

With respect to mortgage brokers, you're right; they're not being punished. But remember that QL has repurchase obligations [[same as banks like Flagstar). They had huge financial implications from poor underwriting. To have the FHA sue them is double-dipping, at best.

Investors knew that their loans were "low doc" or "no doc;" that was disclosed in the prospectuses.

Agree on the securitizers [[who are being sued by investors, as they should) and the rating agencies.

All that goes back to the same question--why is the DOJ selecting, out of all those players, Quicken Loans?

[Richard]

Maybe because of how things went down with the sale of quicken years ago.Not much different then Enron in the aftermath.Everybody walked but the shareholders holding the note . Karma or whatever one wants to call it,and nobody else gets to play in the sandbox.

Sometimes it is better to play nice but maybe not so profitable.

Lets plan the future of a city and let the minions figure it out later,it is still an American city and like anything else sooner or later there will be repercussions one way or another.

I know I am going down,so I am going to take care of you now and when my time is up then it will be your turn to pay the interest.

Lots of reasons for things to work out the way they do but we will only know what we are allowed to.

[compn]

not many people sue the feds and win in court.

so this is probably a ploy to get the feds just to lower the amount of the fine. its a smart gambit if it wins, but if it fails the feds could just double down.

should just make mortgages illegal. you cant buy a house, you never could pay for it, mortgage will only put you in debt for the rest of your life.

[Spartan]

not many people sue the feds and win in court.

so this is probably a ploy to get the feds just to lower the amount of the fine. its a smart gambit if it wins, but if it fails the feds could just double down.

should just make mortgages illegal. you cant buy a house, you never could pay for it, mortgage will only put you in debt for the rest of your life.

Wouldn't be very many homeowners then...

[compn]

a person who "owns a mortgage" is not a "homeowner" at least in my opinion.

he or she is a renter. if he/she fails to pay said mortgage, they will be kicked out of that house.
just like any other renter.

and in a state with so many renters who cant pay their mortgages, dont you think its time to reevaluate the system?

[ndavies]

Yes, but if they pay their mortgage on time and have done the needed maintenance they can have a nice chunk of change when they sell the house. This brings down the cost of their next house or could provide cash in retirement.

Is it better to put money into something that appreciates creating wealth for yourself or pay money to a landlord and have nothing in return when you move?

You seem to be hung up on a once in a lifetime 5 year occurrence rather than the 75 years of wealth generation that has and will continue long after you're dead.

[9606 Prest]

Quicken Loans and Dan Gilbert [[ and Kwame) can sue the DOJ if they wish but If they committed crimes then they must pay! The fault lies with both the borrower who lied about income, assets and employment and the lender who didn't catch the borrower's lies since they didn't really try because they were more concerned about the profit they were making then the actual borrower's financial position.

[Honky Tonk]

Quicken Loans and Dan Gilbert [[ and Kwame) can sue the DOJ if they wish but If they committed crimes then they must pay! The fault lies with both the borrower who lied about income, assets and employment and the lender who didn't catch the borrower's lies since they didn't really try because they were more concerned about the profit they were making then the actual borrower's financial position.

Actually, the borrower didn't have to lie. Towards the end, before the crash, loaners were giving out NINA loans, No Income/No Assets. In fact, they were handing them out like cookies, so everyone got one. Yeah, the evil bankers were definitely to blame, but a lot of consumers were taking advantage of the situation as well.

[Scottathew]

should just make mortgages illegal. you cant buy a house, you never could pay for it, mortgage will only put you in debt for the rest of your life.

I don't agree. That would further the divide between the classes.

I own a house in Warren that I rent out [[my old house). It's worth about $75,000, which means a mortgage on it would be about $600-700. Instead, the renters are paying $1,250 to me.

In this case, it would be far more financially beneficial to buy the house, instead of rent it. In a world where mortgages are "illegal", so many people would needlessly be paying a large premium to live in a house.

The house I live in now would cost about $600 more a month to rent, and the difference will be going up even more once the PMI drops off [[which it is about to).

I know it's easy and popular to demonize lenders, banks, the financial system, etc... However, these financial tools have great benefits for all parties involved. Also, people are not forced into mortgages, so if you think they're terrible, you can simply choose not to enter into mortgage. You are even invited to rent my house for a hefty premium :-)

[ABetterDetroit]

should just make mortgages illegal. you cant buy a house, you never could pay for it, mortgage will only put you in debt for the rest of your life.

Uh... The economy didn't really do so well when the credit market seized for a while there back in 2009 and they pretty much stopped writing mortgages. Your bright idea is to do that permanently?

[animatedmartian]

a person who "owns a mortgage" is not a "homeowner" at least in my opinion.

he or she is a renter. if he/she fails to pay said mortgage, they will be kicked out of that house.
just like any other renter.

and in a state with so many renters who cant pay their mortgages, dont you think its time to reevaluate the system?

Yes, lets return to the Dark Ages where only those of nobility could own anything of value and the economy would take centuries to grow.

[Gannon]

So, this happened.

http://www.clickondetroit.com/news/j...ral-government

[michmina]

You're admitting that you committed mortgage fraud? In no other criminal circumstance is "somebody told me to do it" a defense.

Don't bundle Quicken [[purely a mortgage lender) with investment banks that nearly destroyed the world's economy. They should be held responsible. My question for the DoJ is "where are the indictments" when it comes to Goldman, Lehman, Bear Stearns, etc?

For whatever transgressions Quicken might or might not have been involved in during the big collapse of just a few years ago, I believe they have completely cleaned up their process and are only issuing loans based on verifiable information and not at all like the investment banks.

I have my own issue with Deutsche Bank, who currently is a massive contributor to the glut of abandoned "zombie" homes we have in this area---my mother's house is one of them. She died, Deutsche Bank has abandoned foreclosure purposely so they wouldn't have to pay for taxes or upkeep on the property. The minute the estate filed for quiet title on the house due to DB's abandonment and uncooperative attitude in allowing anyone else to assume responsibility for the loan or even sale of the home, they have popped up to obstruct that also. I've already lost 1 very good cash buyer and am probably going to lose another one in a couple of weeks [[and the 2nd buyer's offer is 17K less than the first one).

I'm at the point where this has gone on for so many years [[she's been dead for almost 4 years now), I will happily allow the county to foreclose for taxes just so DB gets nothing and the county can sell it to someone who will take care of it. There is nothing in it for me at all, my goal all along was to get a TAXPAYER and someone who would keep up the property living there so it wasn't a drain on the community or me, but due to their tactics it's likely they'll pay the taxes in arrears at the last minute and allow the house to remain vacant and without upkeep until they are forced by some entity to maintain the house and property.

That's the type of entity that should have and still needs to be prosecuted for contributing to the blight and lowered property values throughout this area. The courts also have no interest in the community good and are supporting this behavior, which I find repugnant.

[EastsideAl]

I've dealt with a few cases of the Deutsche Bank shuffle you describe, in all cases for loans they didn't originate, but bought on the debt market. They are real assholes and I really wish the feds would go after them [[unlikely though, because of their political ties in Germany). Quicken, on the other hand, has generally been very responsive and decent to deal with. Even when we don't like or agree with their actions, they are at least responsive and pretty fully explanatory, which is more than I can say for several major banks.

[michmina]

Being decent to deal with goes a long way with me. Deutsche Bank is just a miserable institution [[and how we got to Deutsche is they became trustee for mortgages originated with Argent when Argent dissolved). I gave up trying to figure them out years ago. They don't want anyone assuming the mortgage, they don't want the house sold, they don't want to keep up an unsold house...sheesh. Oh, and guess who they used to file an answer to the quiet title? Trott & Trott...I can't say I was surprised.

Make your wills, guys and girls, because you could end up in a quagmire like this due to not having a will. I know my mom didn't mean for this to happen--it was one of those things she put off.