Justice Department and Quicken Loans Headed to Mediation
Quicken Loans Inc. and the federal government have been ordered by a federal judge to mediation in an effort to resolve allegations that the company ignored red flags when granting home loans and disregarded federal lending standards. Parties are now scheduled to meet with mediator Gerald Rosen who is a retired chief judge. If mediation fails the trial is set to begin August 5th.
According to the judge who ordered the two sides to mediation, "With summary judgment motions having been filed and this case approaching a potential period of intense trial preparation, the Court concludes that it would be prudent for the parties to make a renewed effort to resolve this matter."
Quicken’s founder and chairman Dan Gilbert has stated that the company will not settle and stood by that statement following the order to mediate. He issued a statement that said, "We’re certainly going to comply and attend and participate in mediation. We'll fight to the end. This case never should go to trial, and we will continue to do that until the case is dismissed. If it is not, we are prepared to go to trial. We are confident there is no case here."
A month ago the company submitted a motion to have the case dismissed, which was not granted by the judge.
According to the April 2015 lawsuit filed by the federal government, the lender inflated appraisals and granted loans to people with poor credit and insufficient income. Quicken denies the allegations.
The government has alleged that Quicken had a “culture of bending the rules” and gave underwriters bonuses for granting inappropriate or risky loans. Furthermore, the company failed to disclose the issues with the loans to the Federal Housing Administration when they were insuring the loans, which led to thousands of dollars in loss for the federal government.