The Justice Department filed a lawsuit yesterday against Quicken Loans, the nation’s third-largest mortgage lender, contending that it made hundreds of improper loans through the Federal Housing Administration lending program, costing the agency millions of dollars, the New York Times reported today. The FHA does not make loans itself, but insures them. Participating lenders, including Quicken, which makes more FHA loans than any other institution, have the authority to originate, underwrite and certify mortgages covered by FHA insurance. Under the program, if the borrower later defaults, the holder of the loan can file an insurance claim to cover losses.
