Mortgage

Cleveland Cavaliers, Quicken Loans owner fights DOJ in court

While his team battles Golden State Warriors on the court

As LeBron James and his fellow Cavaliers try to secure an NBA title, Cavaliers owner Dan Gilbert, who is also the owner of Quicken Loans, is trying to win a much bigger battle with the United States. Per The Wall Street Journal:

The article notes that while both efforts look promising, major tests still loom.

Quicken Loans, the nation's largest Federal Housing Administration-backed mortgage lender, filed suit in late April in Federal District Court against the United States Department of Justice and the Department of Housing and Urban Development. 

The company says it was left with no alternative but to take this action after the DOJ demanded Quicken Loans make public admissions that were blatantly false, as well as pay an inexplicable penalty or face legal action.

In prosecutors’ lawsuit, they cited alleged abuses such as Quicken endorsing a loan from a borrower who requested a refund of the $400 application fee so she could afford to feed her family. She ultimately made only five mortgage payments before defaulting, costing the government about $94,000 in insurance claims.

Quicken Loans disputes the allegations and, before the Justice Department launched its suit, Quicken pre-emptively filed its own in which it accused the government of trying to illegally pressure the company into a big settlement.

In an exclusive interview with HousingWire, Quicken Loans’ CEO Bill Emerson said that the lender is not going to give in to the government’s pressure and pay up.

“This is about extracting a payment settlement and getting us to suggest that our company did something wrong,” Emerson told HousingWire. “We’re simply not going to do that. We did not commit fraud against the government and we’re not going to cave to the DOJ’s demands and falsely claim that.”

In a trip down memory lane, the WSJ article explains that Quicken Loans’ roots are ancient.

Gilbert founded the company, then called Rock Financial Corp., in 1985. The mortgage lender was purchased by Intuit Inc., makers of the personal-finance software Quicken, in 1999, and the unit was renamed after Intuit’s marquee product. Even though Gilbert and a group of investors bought the mortgage operation back and took it private in August 2002, it has a perpetual agreement with Intuit—which still distributes Quicken software—to use the Quicken Loans brand. Gilbert personally owns a little more than three-quarters of Rock Holdings, the parent company of Quicken Loans, and is the sole board member.

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