Quicken Loans has turned the federal government from attack mode to defense after filing a lawsuit against two of its agencies Friday.
Quicken, the largest lender of Federal Housing Administration mortgage loans in the country, filed its suit in the U.S. District Court for the Eastern District of Michigan against the U.S. Department of Justice and the Department of Housing and Urban Development, claiming the agencies have been trying to bully the company into making “blatantly false” statements and demanding the company pay “an inexplicable penalty or face legal action,” according to a statement released by Quicken Friday.
Quicken has been under FHA investigation for three years as part of federal scrutiny into pre-crash practices of mortgage lenders. Quicken, however, is pulling no punches in defending itself publicly against what it considers unwarranted threats stemming from faulty analysis of “a miniscule number of cherry-picked mortgages from the nearly 250,000 FHA loans the company has closed since 2007,” the statement said.
“By the FHA's own objective public reporting, Quicken Loans has been, and is currently, ranked the highest quality (lowest default rate) lender of any FHA originator in the country,” the statement said.
The Detroit-based lender claims the government has enjoyed “extraordinary profitability for FHA's insurance program” through its efforts, saying the company’s participation in FHA's program will earn the government more than $5.7 billion in net profits “from the insurance premiums collected above and beyond claims made from over $40 billion in FHA home loan volume closed by Quicken Loans during the 2007 to 2013 timeframe.”
Quicken claims it has provided the DOJ with more than 85,000 documents, including 55,000 emails, as requested during Justice’s three-year investigation that has involved “hundreds of hours of depositions from numerous Quicken Loans team members.,” according to the statement.
"After three years of struggling to understand the DOJ's position and methodology,” said Quicken CEO Bill Emerson, “it is time to ask the court to intervene. It's a shame the DOJ would choose to attack the country's largest and highest quality FHA lender … at the very time our nation needs expanded access to credit for middle-class Americans who benefit most from the FHA program.”
Emerson went on to say that his company’s suit against the federal government is an effort to keep the government from thinking it is above accountability.
"The Constitution provides for checks and balances among the three branches of government,” he said. “We are confident that after examining the facts, the judicial branch will exercise their authority to provide just relief from this misuse of power.”