Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau


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Showing 4 posts in False Claims Act (FCA).

DOJ Strikes Back, Accuses Quicken of Breaking HUD Rules to Approve Ineligible FHA Loans

Just days after Quicken Loans, Inc. filed suit against the Department of Housing and Urban Development (“HUD”), HUD’s Office of Inspector General (“HUD OIG”) and the Department of Justice (“DOJ”) in Detroit claiming it was wrongly targeted for minor FHA violations, the DOJ responded by filing its own suit in the U.S. District Court for the District of Columbia. While Quicken’s April 17, 2015 complaint claims the DOJ attempted to strong-arm Quicken into settling potential False Claims Act violations for millions over minor FHA non-compliance issues, the DOJ’s April 23, 2015 complaint alleges that Quicken routinely broke HUD rules to approve ineligible loans on a grand scale, knowing that those loans would be insured by the FHA and therefore cause no loss to Quicken.   Read More ›

Its Own Medicine: Quicken Loans Alleges Wrongdoing in DOJ and HUD OIG Investigation of FHA Loans

On April 17, 2015, Detroit-based mortgage provider Quicken Loans, Inc. filed suit in the United States District Court of the Eastern District of Michigan against the United States, the Department of Housing and Urban Development (“HUD”), HUD’s Office of Inspector General (“HUD OIG”) and the Department of Justice (“DOJ”). Quicken’s lawsuit represents a unique offensive move, challenging the fundamental fairness of federal investigative techniques which Quicken argues amount to abuse of governmental authority.  Read More ›

BREAKING NEWS: Bank of America Sued By U.S. Government For $1 Billion Over Alleged Mortgage Fraud

As previously predicted by the CFS-Lawblog, the federal government filed suit today (10/24/12) against another major lender under the False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA). This time the government is seeking more than $1 billion in damages and civil penalties against Bank of America regarding loans sold to Fannie Mae and Freddie Mac. In announcing the lawsuit, U.S. Attorney Preet Bharara claims that Countrywide Financial and Bank of America implemented a new loan origination process that “was intentionally designed to process loans at high speed and without quality checkpoints, and which generated thousands of fraudulent and otherwise defective residential mortgage loans sold to Fannie Mae and Freddie Mac that later defaulted, causing over $1 billion dollars in losses and countless foreclosures.” According to the government’s complaint, this purported program was started by Countrywide, but continued after Bank of America purchased Countrywide in 2008. (Click here for a copy of the complaint against Bank of America) Read More ›

U.S. Sues Wells Fargo Under False Claims Act

Yesterday (10/9/12), the federal government continued its aggressive assault on financial institutions by filing suit against Wells Fargo, seeking multiple hundreds of millions of dollars in damages and civil penalties under the False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA). The suit, filed in U.S. District Court for the Southern District of New York, claims that for the past 10 years Wells Fargo falsely certified over 6,500 loans to meet the eligibility standards for government insurance. In a press release, U.S. Attorney Preet Bharara claims that his Civil Fraud Unit found, “yet another major bank has engaged in a longstanding and reckless trifecta of deficient training, deficient underwriting and deficient disclosure, all while relying on the convenient backstop of government insurance.” So much for the concept of being innocent before proven guilty. Wells Fargo has denied these allegations and has promised to “vigorously defend itself against this action.” Read More ›