Last Friday the Detroit-based Quicken Loans sued the Department of Justice, alleging that the DOJ was pressuring it to pay a settlement for fraud the company says it didn’t commit. The feds have now made their suspicions official, charging Quicken with “improperly originating and underwriting mortgages” that the government ended up paying for after unqualified borrowers defaulted. Quicken founder Dan Gilbert is a major civic figure in Detroit who argues that his ventures—he also owns the city’s Greektown Casino—are helping rejuvenate the city. He also owns the Cleveland Cavaliers, through which he’s had a high-profile on-again-off-again relationship with NBA superstar LeBron James. From a Detroit News reporter:
Per the Wall Street Journal, the DOJ alleges that “Quicken pushed back on appraisals when a home received too low a valuation to qualify for a loan, and that Quicken’s own management team was concerned about some of its loan-underwriting practices.”
Quicken’s own lawsuit against the government, which mentions that the federal investigation began almost three years ago, charges that the DOJ’s claims are based on a small number of minor errors.
