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

**Scottathew** · April-20-15, 02:57 PM

"Quicken Loans is suing the federal government, claiming a three-year investigation into some of its past lending practices is really a strong-armed attempt to get a big settlement and admission of wrongdoing from the Detroit-based company.

Quicken filed its lawsuit late last week against the Department of Justice and the U.S. Department of Housing and Urban Development.

"Quicken Loans appears to be one of the targets [[due to its large size) of a political agenda under which the DOJ is 'investigating' and pressuring large, high-profile lenders into paying nine- and 10-figure sums and publicly 'admitting' wrongdoing, including conceding that the lenders had made 'false claims,' " the lawsuit says.

... More at Freep.com"

**Gannon** · April-20-15, 04:37 PM

So...they are basically trying to get a judge to pre-empt what must be an upcoming prosecution attempt by declaring they're Too Big To Fail?!

"We're only being targeted because we're so huge, if not for our collective largeness...which must indicate honesty and stellar ethics, hey we're our employees favorite place to work!..." [[a made-up quote done in jest, but with regards to actual concepts and comments a good PR flak or attorney might manufacture, or things actually said by some poltroon)

This is an act of desperation.

Seems a shoe is about to drop.

NOT looking forward to this next episode.

**313WX** · April-20-15, 04:38 PM

Originally Posted by Gannon

So...they are basically trying to get a judge to pre-empt what must be an upcoming prosecution attempt by declaring they're Too Big To Fail?!

If what you say ends up being the case, I'm definitely willing to stay tuned to see this drama play out. It's going to get very messy...

**Gannon** · April-20-15, 04:51 PM

I'd guess a judge has the power to sequester information regarding a lawsuit...perhaps stall the Feds...and even put a media blanket over the whole thing.

That would distract any prosecution attempt...but it is a dangerous play.

The judge could dismiss it out-of-hand for its obvious blocking nature, even before hearing what the Feds might actually have.

But if he brings their data into the evidence, Quicken gets to see what they've got.

I mean, in the chess game of life, this is a pretty smart move...risky. Here's to hoping whatever agreement he made to escape all that sub-prime crap includes a future behavior clause.

**Gannon** · April-20-15, 05:05 PM

The lawsuit says Justice is threatening a high-profile lawsuit involving a much larger number of loans unless the company agrees to pay a large settlement and "admit" flawed lending practices and federal Fair Claims Act violations.

Sounds like the Feds are making their usual play...damnit. Apparently a move like this is unprecedented.

**BankruptcyGuy** · April-20-15, 06:39 PM

I am happy that Quicken decided to make this move. The Wall St. Journal has documented numerous cases where the DoJ has threatened their way to a settlement. Here's an interesting one:

http://www.wsj.com/articles/prosecut...law-1420242330

and another

http://www.wsj.com/video/opinion-plu...C6370A4C3.html

I'm glad someone is finally fighting back. Keep in mind that, if Quicken DID improperly document a loan, and the borrower DID default, then Quicken has to buy the loan back. The investigation is out for more. It follows this inaccurate theme that the fault doesn't lay with the borrower who lied about income, assets and employment, it's the lender who didn't catch the borrower's lies who is at fault. Unfortunately for the DoJ, that's not how the law works.

Good for you, Mr. Gilbert.

**Malcove Magnesia** · April-20-15, 07:14 PM

I don't like QuickenLoans as a mortgage provider [[their rates aren't as good as what you can find by doing a bit more intensive shopping around), but they seem to be a pretty stellar business [[in terms of employing people in the city, investing back into the city, etc.), so I wish them the best of luck in fighting against the DoJ in this case.

**JBMcB** · April-20-15, 08:49 PM

Originally Posted by BankruptcyGuy

I'm glad someone is finally fighting back. Keep in mind that, if Quicken DID improperly document a loan, and the borrower DID default, then Quicken has to buy the loan back.

I think the issue here is that there were a number of small loan/mortgage resellers who were playing fast and loose with the initial loan paperwork, trying to put together as many deals as possible to make a quick buck off of points. People assume the large loan companies were doing the same thing, though there isn't much evidence that they were doing so in a systematic fashion.

**DetroiterOnTheWestCoast** · April-20-15, 10:30 PM

Originally Posted by BankruptcyGuy

I am happy that Quicken decided to make this move. The Wall St. Journal has documented numerous cases where the DoJ has threatened their way to a settlement. Here's an interesting one:

http://www.wsj.com/articles/prosecut...law-1420242330

and another

http://www.wsj.com/video/opinion-plu...C6370A4C3.html

I'm glad someone is finally fighting back. Keep in mind that, if Quicken DID improperly document a loan, and the borrower DID default, then Quicken has to buy the loan back. The investigation is out for more. It follows this inaccurate theme that the fault doesn't lay with the borrower who lied about income, assets and employment, it's the lender who didn't catch the borrower's lies who is at fault. Unfortunately for the DoJ, that's not how the law works.

Good for you, Mr. Gilbert.

I recall being told exactly how to fill out the papers by a lender years ago. "You have to say that loan from your mother is a gift"....etc. so that the paper trail would look "right". The mortgage and banking industry brought the country to its knees. I'm not saying Quicken did, but its disgusting that the economy was almost destroyed by the "too big to fail" guys. To portray the lenders as the ones who were duped is mind boggling.

**bailey** · April-21-15, 10:02 AM

Originally Posted by BankruptcyGuy

I am happy that Quicken decided to make this move. The Wall St. Journal has documented numerous cases where the DoJ has threatened their way to a settlement. Here's an interesting one:

http://www.wsj.com/articles/prosecut...law-1420242330

and another

http://www.wsj.com/video/opinion-plu...C6370A4C3.html

I'm glad someone is finally fighting back. Keep in mind that, if Quicken DID improperly document a loan, and the borrower DID default, then Quicken has to buy the loan back. The investigation is out for more. It follows this inaccurate theme that the fault doesn't lay with the borrower who lied about income, assets and employment, it's the lender who didn't catch the borrower's lies who is at fault. Unfortunately for the DoJ, that's not how the law works.

Good for you, Mr. Gilbert.

While I agree with the need for QL to fight back, I think it's interesting to note Bodman or Honnigman aren't handling this [[usual go to's for QL and QL related stuff) but Kwame's former lawyers.

**BankruptcyGuy** · April-21-15, 11:22 AM

Originally Posted by JBMcB

I think the issue here is that there were a number of small loan/mortgage resellers who were playing fast and loose with the initial loan paperwork, trying to put together as many deals as possible to make a quick buck off of points. People assume the large loan companies were doing the same thing, though there isn't much evidence that they were doing so in a systematic fashion.

There were small brokers who played fast and loose with paperwork. If the mortgagor defaults, and there were problems with paperwork on a loan Quicken bought, Quicken would have to buy the loan back. This is more than that. This is trying to get a "scalp" to demonstrate a failed theory that it was big, bad lenders that caused the housing crisis. It always takes two to tango.

**mwilbert** · April-21-15, 01:06 PM

Originally Posted by BankruptcyGuy

There were small brokers who played fast and loose with paperwork. If the mortgagor defaults, and there were problems with paperwork on a loan Quicken bought, Quicken would have to buy the loan back. This is more than that. This is trying to get a "scalp" to demonstrate a failed theory that it was big, bad lenders that caused the housing crisis. It always takes two to tango.

This doesn't really seem like the right way of looking at it. Of course borrowers who made material misrepresentations of their finances have some fault in the matter, but the systemic problem was lenders willing to accept those misrepresentations. Why don't we have this problem now? I doubt people are much more honest than they were 10 years ago, and housing prices have been rising rapidly. The obvious answer is that the lenders have changed their behavior and won't make those loans, and, even more importantly, the market for undocumented paper no longer exists, so if they did make them, they couldn't get rid of them. Neither of those has anything to do with the dishonest borrowers.

Certainly the borrowers are part of the picture, and if everyone had been completely honest things would have been different, but the people who screwed up were the lenders and the securitizers and those cockeyed optimists [[morons) who bought the securitized loans.

**hortonz** · April-21-15, 09:54 PM

I don't know what Dan Gilbert's politics are but I'll bet if he's a major Republican contributor then Obama's Justice Dept. might be giving Quicken Loans lending practices a lot more scrutiny than necessary.

**Scottathew** · April-22-15, 07:32 AM

Originally Posted by hortonz

I don't know what Dan Gilbert's politics are but I'll bet if he's a major Republican contributor then Obama's Justice Dept. might be giving Quicken Loans lending practices a lot more scrutiny than necessary.

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.

**Packman41** · April-22-15, 08:38 AM

Originally Posted by 48307

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

That is the problem - this may never get to court. When the DOJ comes knocking they bring a lot [[some say too much) power with them. In fact, the DOJ may not even want to go to court, but just do the green mail money grab.

Let us assume you are correct and QL has done nothing wrong. The DOJ can make ANY allegation they want and not have to show proof or cause, they can just claim “disparate impact”. That is, the actions made by QL were neutral, non-discriminatory and unintentional, but through some creative DOJ statics they claim a specific group was disproportionally affected.

The DOJ just throws out their claim and see how far it goes. Now it is up to QL to prove they did nothing wrong and the specific group was not adversely affected. Whatever happened to being innocent until proven guilty? They will have to spend a lot of money to defend against [[false) allegations. Plus they will have to spend a HUGE amount of time on public relations to keep their good name intact because the DOJ never apologizes.

So it boils down to the math. What is cheaper? To cave to the allegations of the DOJ? Or to fight it in court and hope you get cleared? Either way you have to cough up a lot of dough because [[as we assumed) you did nothing wrong.

**BankruptcyGuy** · April-22-15, 10:03 AM

Originally Posted by DetroiterOnTheWestCoast

I recall being told exactly how to fill out the papers by a lender years ago. "You have to say that loan from your mother is a gift"....etc. so that the paper trail would look "right". The mortgage and banking industry brought the country to its knees. I'm not saying Quicken did, but its disgusting that the economy was almost destroyed by the "too big to fail" guys. To portray the lenders as the ones who were duped is mind boggling.

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?

**BankruptcyGuy** · April-22-15, 10:09 AM

Originally Posted by mwilbert

This doesn't really seem like the right way of looking at it. Of course borrowers who made material misrepresentations of their finances have some fault in the matter, but the systemic problem was lenders willing to accept those misrepresentations. Why don't we have this problem now? I doubt people are much more honest than they were 10 years ago, and housing prices have been rising rapidly. The obvious answer is that the lenders have changed their behavior and won't make those loans, and, even more importantly, the market for undocumented paper no longer exists, so if they did make them, they couldn't get rid of them. Neither of those has anything to do with the dishonest borrowers.

Certainly the borrowers are part of the picture, and if everyone had been completely honest things would have been different, but the people who screwed up were the lenders and the securitizers and those cockeyed optimists [[morons) who bought the securitized loans.

Let me put it this way: if the DoJ is poking around Quicken, where are the indictments for:

a) mortgage fraud by the borrowers;
b) mortgage fraud by the warehousers [[who sell to QL);
c) fraud by real estate brokers, appraisers, title companies, etc.?

**Bham1982** · April-22-15, 10:11 AM

Originally Posted by BankruptcyGuy

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?

LOL. Translation- Quicken is based in Detroit so under some imaginary "Detroit Rule" shouldn't be held to any civil or criminal penalties by DOJ; other companies aren't based in Detroit and therefore should be held to severe civil and criminal penalties [[in fact every company you mention suffered huge penalties; one of the three, Bear, was actually forced to shut down by the feds).

The only reason anyone in this thread is defending Quicken is because they set up shop downtown. If they were in Oakland County or NYC, or really anywhere outside of downtown/midtown Detroit, this thread would be nothing but "shut them down", "get these bloodsuckers", etc.

**bailey** · April-22-15, 01:46 PM

Originally Posted by Bham1982

LOL. Translation- Quicken is based in Detroit so under some imaginary "Detroit Rule" shouldn't be held to any civil or criminal penalties by DOJ; other companies aren't based in Detroit and therefore should be held to severe civil and criminal penalties [[in fact every company you mention suffered huge penalties; one of the three, Bear, was actually forced to shut down by the feds).

The only reason anyone in this thread is defending Quicken is because they set up shop downtown. If they were in Oakland County or NYC, or really anywhere outside of downtown/midtown Detroit, this thread would be nothing but "shut them down", "get these bloodsuckers", etc.

No, the problem is this....

The lawsuit says Justice and HUD started investigating Quicken's handling of FHA-insured loans about three years ago, and "cherry-picked" 55 examples that were problematic out of more than 246,000 Quicken originated in 2007-11.

and..

Quicken said the defects found by the Justice Department in the 55 loans are minor, such as miscalculating a loan applicant's monthly income by $2.10, telling a borrower to bring $125 to closing even though it had approved a loan that only needed $48 at closing, and loaning an FHA customer $26 too much on a $99,500 mortgage.

Yes, of course we're paying attention to it because we live here...but it doesn't strike me as a groundless objection by QL. Sounds like they're calling out some improper or at least over technical shenanigans. I guess we'll see who's right. But I would suspect if QL was HQ'd in NYC and had an army of K Street lobbyists, it wouldn't have been visited by the DOJ in the first place...call me cynical.

And if one is really going to lump QL into what Bear or Countrywide did...well, I guess one is entitled to be willfully stupid...it's 'merica after all.

**BankruptcyGuy** · April-22-15, 03:51 PM

Originally Posted by Bham1982

LOL. Translation- Quicken is based in Detroit so under some imaginary "Detroit Rule" shouldn't be held to any civil or criminal penalties by DOJ; other companies aren't based in Detroit and therefore should be held to severe civil and criminal penalties [[in fact every company you mention suffered huge penalties; one of the three, Bear, was actually forced to shut down by the feds).

The only reason anyone in this thread is defending Quicken is because they set up shop downtown. If they were in Oakland County or NYC, or really anywhere outside of downtown/midtown Detroit, this thread would be nothing but "shut them down", "get these bloodsuckers", etc.

That Detroiters support Detroit companies shouldn't be a surprise. Do you expect us to root for the Yankees, too?

I've searched all over the internet to see the video of the Lloyd Blankfien or Angelo Mozilo or Dick Fuld perp walk. Can't seem to get my hands on those.

My point is, if you're going to blame someone for 2008, start [[and stop) there.

**Packman41** · April-22-15, 04:27 PM

Originally Posted by BankruptcyGuy

I've searched all over the internet to see the video of the Lloyd Blankfien or Angelo Mozilo or Dick Fuld perp walk. Can't seem to get my hands on those.

I also looked for the perp walk video of Franklin Raines and could not find it.

When he was the CEO of FNMA he was accused by a government regulating body of widespread accounting errors, [[a mere $6.3 BILLION oversight) which included the shifting of losses so senior executives, such as himself, could earn large bonuses.

A few years earlier these same type of “accounting errors” at Enron got people sent to prison and caused the collapse of the accounting firm Arthur Anderson. Meanwhile, in 2003 Raines earned over $20 million as a government employee. Nice work and nice cover when you are politically connected.

**ndavies** · April-23-15, 03:28 PM

Here comes the Feds.

http://www.detroitnews.com/story/bus...ding/26254859/

**Bham1982** · April-23-15, 03:36 PM

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.

**warsaw7** · April-23-15, 03:47 PM

Originally Posted by Bham1982

LOL. Translation- Quicken is based in Detroit so under some imaginary "Detroit Rule" shouldn't be held to any civil or criminal penalties by DOJ; other companies aren't based in Detroit and therefore should be held to severe civil and criminal penalties [[in fact every company you mention suffered huge penalties; one of the three, Bear, was actually forced to shut down by the feds).

The only reason anyone in this thread is defending Quicken is because they set up shop downtown. If they were in Oakland County or NYC, or really anywhere outside of downtown/midtown Detroit, this thread would be nothing but "shut them down", "get these bloodsuckers", etc.

Really? Funny you mention that, read some of the comments, which are from New York residents.. Stop trolling on Detroit and QL....

http://www.wsj.com/articles/quicken-...vefyre-comment

**Bham1982** · April-23-15, 04:13 PM

Originally Posted by warsaw7

Really? Funny you mention that, read some of the comments, which are from New York residents.. Stop trolling on Detroit and QL....

http://www.wsj.com/articles/quicken-...vefyre-comment

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.