DETROIT, November 14, 2016 – Quicken Loans, the nation’s largest Federal Housing Administration (FHA) mortgage lender that also has the nation’s highest quality loan performance (lowest default rates), issued the following statement in response to the ruling of Judge Reggie B. Walton in the case of USA v. Quicken Loans:
Quicken Loans (QL) strongly agrees with Judge Reggie B. Walton’s ruling granting the company’s motion to transfer the Department of Justice (DOJ) lawsuit to the Eastern District Court in downtown Detroit. QL headquarters and its 16,000 team members, as well as the vast majority of its loan processing and underwriting operations are all in Detroit, making the Eastern District Court the only appropriate venue to hear the government’s “claims.”
Judge Walton was apparently not persuaded by the government’s bewildering arguments. Among them was that QL’s sponsorship of a Washington, D.C.-area charitable PGA TOUR outing supporting our troops justified hearing this case in the District of Columbia Court.
QL is confident that the Eastern District Court will find the remainder of the DOJ’s arguments just as puzzling.
- Why is the DOJ bringing litigation against the nation’s largest FHA mortgage lender that also has the nation’s lowest default rates? According to the FHA’s own data, mortgages originated by QL have the smallest percentage of claims among lenders closing relevant volume. It is incongruent for the government to assert that QL had a sweeping “scheme” to make bad loans, when, by the FHA’s own account, QL originated the best performing loans in the portfolio (3X better than the FHA’s overall portfolio).
- Why is the DOJ bringing litigation against QL, when the FHA insurance fund is ahead billions of dollars on QL’s total pool of business and is expected to continue to profit enormously in years to come due to its stellar quality and loan performance (net even the relatively small number of claims)?
- QL has closed more than 450,000 FHA loans since 2007. Why did the DOJ bring forward a case that is entirely based upon the faulty review of a mere 55 cherry-picked loans?
- Among the “errors” committed by QL in these 55 loans is a miscalculation of monthly income by $2 and lending a client $26 too much. Why would the DOJ complaint include loans with inconsequential errors?
- The DOJ subpoenaed over 85,000 documents and emails; 20 emails were cited in the DOJ’s claim. Of those, only 8 relate to a loan. 6 of the 8 loans never went to claim, and one was not even an FHA loan. The DOJ complaint includes out-of-context, often irrelevant snippets of long email exchanges that grossly distort the meaning and intentions of QL team members. Why would the DOJ rely on immaterial, out-of-context information when it had complete access to enormous amounts of data?
- Why did the DOJ sue primarily large FHA lenders, while never engaging in litigation with hundreds of FHA lenders who had sub-standard quality and loan performance – some with default rates 200%-500% worse than QL and other large lenders?
“I think it is becoming increasingly clear what we have known all along: the DOJ case against QL has absolutely no merit,” said Dan Gilbert, Quicken Loans Founder and Chairman. “QL is the gold standard for residential lending in this country. We have had the FHA’s lowest delinquency and default rates in the nation for years, resulting in billions of dollars of profits to the FHA insurance fund. It is obvious the DOJ made a conscious decision to exert pressure on the largest lenders in the country, using the weight of the federal government and its endless capacity to bring lengthy litigation and corresponding reputational damage without regard for the actual validity of its claims. DOJ’s strategy was deployed for the sole purpose of extracting large settlements. We do not succumb to these egregious tactics. QL’s outstanding reputation hard-earned over 31 years is not for sale.”
QL stands behind its lending and is one of four top-10 mortgage lenders by volume that has not significantly, or completely, pulled back from FHA lending due primarily to DOJ pressure and the lack of clarity surrounding the program itself. In fact, it is high-quality lenders like FHA’s largest lender QL that have helped stabilize the FHA insurance pool at a time when the program has been notorious for funding shortfalls.
About Quicken Loans
Detroit-based Quicken Loans Inc. is the nation’s second largest retail home mortgage lender. The company expects its total close loan volume to reach close to $320 billion of mortgage volume across all 50 states between 2013 and the end of 2016. Quicken Loans generates loan production from web centers located in Detroit, Cleveland and Scottsdale, Arizona. The company also operates a centralized loan processing facility in Detroit, as well as its San Diego-based One Reverse Mortgage unit. Quicken Loans ranked “Highest in Customer Satisfaction for Primary Mortgage Origination” in the United States by J.D. Power for the past seven consecutive years, 2010 – 2016, and highest in customer satisfaction among all mortgage servicers the past three years, 2014 – 2016.
Quicken Loans was ranked No. 5 on FORTUNE magazine’s annual “100 Best Companies to Work For” list in 2016, and has been among the top-30 companies for the last 13 years. It has been recognized as one of Computerworld magazine’s ’100 Best Places to Work in IT’ the past 12 years, ranking No. 1 in 2016, 2015, 2014, 2013, 2007, 2006 and 2005. The company moved its headquarters to downtown Detroit in 2010, and now more than 10,000 of its 15,000 team members work in the city’s urban core. For more information about Quicken Loans, please visit QuickenLoans.com, on Twitter at @QLnews, and on Facebook at Facebook.com/QuickenLoans.