Business

Gilbert's Quicken Loans Settles Legal Beef with U.S. Justice Department for $32.5 Million


June 14, 2019, 3:40 PM

Dan Gilbert's Quicken Loans Inc., after battling the feds in court since 2015, will pay $32.5 million to settle a Justice Department claims of impromper lending practices involvling the Federal Housing Administration. 

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The settlement announced Friday comes with no admission of wrongdoing, according to a startement by the mediator, Kirk Pinho of Crain's Detroit Business reports. The statement says the settlement consists of $25.5 million to make the government whole for losses and $7 million in interest.

The mediator is former U.S. District Judge Gerald Rosen.

"We have always been proud of our growing participation in the FHA program. Every day teachers, police officers, factory workers and so many others who are the backbone of our communities, utilize Quicken Loans for this very important loan program," CEO Jay Farner said in a statement.

"Now that this dispute is behind us, we look forward to cultivating and expanding our relationship with both FHA and HUD so we can increase Americans' access to home financing and home ownership."

The Justice Department sued in 2015, claiming the company knowingly submitted claims for hundreds of improperly underwritten Federal Housing Administration-insured loans that ended up costing the government millions when the loans went bad. The loans involved inflated appraisals, poor credit risks and borrowers with insufficient incomes, the government alleged.

Gilbert had denied wrongdoing all along. The settlement comes as he remains at Beaumont Hospital after a serious stroke.


Read more:  Crain's Detroit Business


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