Privately held Quicken Loans is making a bold move in counter-suing the U.S. government, saying that federal prosecutors cherry-picked 55 FHA-insured loans out of the nearly 250,000 the company has closed on since 2007, the Wall Street Journal reported today. In April, the Justice Department accused Quicken Loans of defrauding taxpayers, charges that Quicken denies. The government says that the company submitted mortgages for insurance by the Federal Housing Administration that it knew, or should have known, were ineligible. Prosecutors say that between 2007 and March 2015, the government paid out over half a billion dollars in insurance claims on defaulted mortgages endorsed by Quicken. Prosecutors didn’t specify how many of those claims they allege were linked to fraudulent loans. Quicken Loans last year extended $59 billion in mortgages, surpassing Bank of America Corp. to become the third-largest mortgage lender in the U.S., according to Inside Mortgage Finance. Quicken executives added that they are fulfilling the mission of the FHA program by lending to low- and middle-income consumers, an area in which they have picked up market share as banks such as JPMorgan Chase & Co. have retreated from the business. The executives added that prosecutors’ actions are resulting in fewer lenders making loans to marginal borrowers and first-time home buyers.
