Quicken Loans to pay $32.5M to settle lawsuit over bad loans
Quicken Loans has agreed to pay $32.5 million to settle a lawsuit that accused the company of fraudulently sticking the government with bad mortgages.
Crain's Detroit Business says the agreement, with no admission of wrongdoing, was disclosed Friday by Gerald Rosen, a former judge who served as mediator.
The government had accused Quicken of cutting corners when verifying the income of certain borrowers. Quicken also was accused of seeking improper appraisals so it could make a larger mortgage. The loans were insured by the Federal Housing Administration, which paid Quicken if a borrower defaulted.
The Detroit-based company denied the allegations and had described the lawsuit as "abusive." Quicken will remain in the FHA program after the agreement.
Quicken's founder is Detroit businessman Dan Gilbert, who owns the NBA's Cleveland Cavaliers. He is recovering from a stroke.