Back in the ol’ hometown, ctd

The Feds are suing Quicken Loans — the mortgage company, whose advertisements are a television staple, is headquartered in Detroit — for being not-too-finicky about the people to whom the company lends money.

The U.S. Justice Department has filed a lawsuit against Quicken Loans, alleging the mortgage lender violated underwriting rules, which materialized in “millions of dollars” of losses to the U.S. Housing and Urban Development (HUD) agency.

“Those who do business with the United States must act in good faith, including lenders that participate in the FHA mortgage insurance program,” said Benjamin C. Mizer, principal deputy assistant attorney general of the Justice Department’s Civil Division, in a statement Thursday.

Yes, I’m related to the Ryan Felton who wrote the piece; he is my nephew. Ryan has tracked Quicken for a while, publishing this profile of the company and its founder last November.

On a recent Saturday night, inside the Checker Bar & Grill in downtown Detroit, someone mentions the name of Detroit’s most recognizable billionaire. A thirty-something gentleman sitting nearby, nursing a PBR, lets out an audible sigh and shakes his head, again and again.

“I hate that guy,” he says, slowly.

That’s a view of Daniel Gilbert, founder of online lending giant Quicken Loans, the public doesn’t hear about too often.

As everybody knows now, the financial meltdown of 2008 began with bad mortgage loans, loans blithely waved through the vetting with everybody along the line knowing perfectly well that, long after they had received and spent their commission, the feds would be on the hook for the bad paper. Apparently, the feds think Quicken hasn’t learned the lesson yet.

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