Judge rules DOJ can pursue FHA lending charges against Quicken Loans

But statue of limitations significantly narrows time frame

A judge ruled on Thursday that the Department of Justice can pursue its charges against Quicken Loans over FHA lending violations, according to an article by Jennifer Chambers in The Detroit News.

However, U.S. District Judge Mark A. Goldsmith didn’t grant the DOJ everything it wanted. The article stated that Goldsmith substantially narrowed the time frame covered by the suit. Quicken, on the other hand, asked the judge to dismiss the case in full – a request that was not granted.

From the article:

Goldsmith said the statute of limitations only allows Justice to seek recovery on claims on April 23, 2009, and after. The government’s original complaint alleges that Quicken’s fraudulent conduct occurred between Sept. 1, 2007, and Dec. 31, 2011.

Goldsmith also said the government failed to file allegations to support its claims that Quicken manipulated data during the loan process.

He dismissed that portion of the lawsuit, leaving several other allegations in place

“Quicken Loans is pleased the court recognized that portions of the Justice Department’s overreaching lawsuit against the company exceeded the bounds of legality and were dismissed narrowing the claims significantly in terms of time frame and scope,” Quicken Loans said in a statement to The Detroit News.

In February of this year, the two parties met before the U.S. District judge for a hearing on Quicken Loans’ request to have the case dismissed.

However, since Goldsmith denied the motion to have the case dismissed, the trial will begin in April 2019.

As a recap, Quicken, which is the nation's largest Federal Housing Administration-backed mortgage lender, sued the DOJ and HUD in April 2015. Quicken accused the Justice Department of trying to squeeze money from companies which would usually wish to avoid a costly legal battle against FHA violation charges. Instead of paying up, Quicken said it decided to fight back in court.

The government was quick to react and countersued Quicken Loans. In the United States government’s lawsuit, it accused Quicken Loans of improperly originating and underwriting loans insured by the FHA.

And while Quicken Loans hit a roadblock in December when a federal judge tossed out its lawsuit, it will continue to fight to defeat the government’s retaliatory lawsuit alleging that Quicken Loans violated the ‘False Claims Act.’

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