×

Quicken Loans CEO tells DOJ to pound sand on mortgage allegations

Quicken Loans CEO Bill Emerson said Monday that the Detroit-based housing lender won't settle with the government over allegations of filing false claims on federally insured mortgages.

"For us, that's not something we can even begin to stomach," he told CNBC's "Squawk Box," saying he welcomes a jury trial. "[To] look our 12,000 team members in the eye and say, 'guess what, we committed fraud against the United States government' … we didn't. We won't say it."

Last year in a complaint, the Justice Department accused Quicken Loans of submitting or causing the submission of claims for hundreds of improperly underwritten loans insured by the Federal Housing Administration from September 2007 to December 2011. On the same type of issues, the DOJ has gone after many other lenders, which resulted in more than $100 million in mortgage settlements.


"The largest, most well-capitalized lenders in the country have been systematically targeted by the DOJ. And they go in and take a look and threaten and they shame ... and try to put pressure on people to settle," Emerson said.

He admitted simple mistakes are made when writing loans. "An example, we miscalculated income by $2.10. We over-lent somebody $26 on a loan program. Those are the type of things the Department of Justice is saying is committing fraud against the United States government. And it's just dead wrong."

Last week, Housing and Urban Development Secretary Julian Castro told "Squawk Box" he would not comment on ongoing litigation, calling it "looking backward into the past."

Castro said: "The opportunity we have in front of us, particularly at FHA and HUD, is to insure that we work with lenders and borrowers to create good business certainty, and also to create great opportunity for hardworking middle-class families out there who are responsible and who can get a home loan and pay on that responsibly."

Responding to Castro, Emerson accused the government of trying to have to both ways. "The [Obama] administration says, 'let's lend to more people,' on the other hand, 'let's go after lenders and hold them accountable and make them pay tons of money.'"


Morning Squawk: CNBC's before the bell news roundup

Sign up to get Morning Squawk each weekday

Get this delivered to your inbox, and more info about about our products and service. Privacy Policy.
Please enter a valid email address

— Reuters contributed to this report.