A look at Biden’s first week in office

This episode reviews last week’s inauguration of President Joe Biden, examining which housing issues the new administration has already taken action on.

Biden’s executive order will extend foreclosure moratorium

President Biden revealed his plan to sign 17 executive orders his first day in office, including am extension of the eviction and foreclosure moratorium to at least March 31.

How servicers continue to protect neighborhoods amid COVID

We spoke with MCS CEO Caroline Reaves about self-service technology, the shift to virtual and how servicers can prepare for post-COVID success by improving processes today.

HomeBridge’s Brian White on diversity at a practical level

HomeBridge's Brian “Woody” White discusses ways to increase diversity within the housing finance industry.

Mortgage

Quicken Loans Vice Chairman Bill Emerson: Government used “extortionist tactics” to pursue “bogus” claims

"This case was dismissed and there was zero finding of fault"

On Friday, Quicken Loans and the Department of Justice reached a resolution over allegations that the nonbank’s FHA lending practices violated the False Claims Act.

Without any admission of guilt or determination of wrongdoing on either side, Quicken agreed to pay the government $32.5 million to resolve allegations dating back to 2015 that claimed the lender improperly underwrote loans for FHA mortgage insurance.

Quicken Loans Vice Chairman Bill Emerson said the matter has been resolved, but emphasized that the nonbank did not admit to any guilt – instead insisting that Quicken did nothing wrong, a position it has long maintained.

“We have said from the beginning we did nothing wrong and the claims were absolutely bogus,” Emerson told HousingWire in an exclusive interview shortly after news of the solution hit. “This case was dismissed and there was zero finding of fault on Quicken Loans’ behalf.”

Emerson said Quicken refused to settle the case and pledged to fight it every step of the way, believing that the government was employing “extortionist tactics” by insisting that Quicken make false admissions of guilt and pay a hefty fine or face legal action.

“We fought it all the way through, and [the case] got smaller, smaller, smaller, smaller,” Emerson said. “The government realized that they had no basis in fact for their claims against us.”

Emerson said that as part of the resolution, Quicken is only paying for a small fraction of the $108 billion worth of FHA loans it has originated since 2007.

“We’re making them whole on 25.5 million of them, or 0.02% of the entire production that we’ve done with FHA,” he said.

Quicken’s case with the DOJ was widely discussed in the mortgage industry for shedding a bright spotlight on the Obama administration’s practice of pursuing FHA lenders under the False Claims Act for allegedly originating mortgages that were not up to FHA standards.

Quicken was one of the few lenders to fight back against the government’s increased use of the False Claims Act as a means to extract massive settlements from FHA lenders.

Now, the Trump administration has backed off that strategy, with both FHA Commissioner Brian Montgomery and HUD Secretary Ben Carson saying that the administration will no longer pursue FHA lenders for alleged False Claims violations.

Emerson said he couldn’t say whether or not Quicken’s refusal to back down helped convince HUD to revise its strategy, but welcomed the change of policy nonetheless.

“I think the current HUD administration realized how faulty the previous administration’s tactics were, and frankly, as we’ve said before, we viewed them as extortionist tactics and we just could not go along with that,” Emerson said. “We know we didn’t do anything wrong and so we continued to fight, and if that somehow caused the new administration to evaluate it differently, then great.”

Emerson said the allegations have not caused Quicken to change its FHA lending practices at all.

“By FHA’s own standards, we’re the highest quality lender with the lowest default rate. We have done things right the entire time, and we’ll continue to do so,” he said. “We’ll continue to help everyday Americans who need loan financing through the FHA program.”

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