Have you heard about the one where the lender sues the government for false accusations? Who says you can’t fight city hall? One lender, Quicken Loans is fighting back against claims made by the DOJ (False Claims).
Quicken, one of the nation’s largest originators of FHA insured loans, has decided it has had enough and isn’t going to take the DOJ allegations, or pay a substantial penalty, lying down. They will not be bullied into some bogus settlement agreement when they believe they have done nothing wrong. We’ll see how this one turns out.
Hopefully, for Quicken’s sake, and maybe the sake of the entire lending industry, they prevail (as long as they didn’t do anything wrong). Do most mortgage lenders have the financial capability to forge such a fight in the event allegations are brought against them?
It can be quite daunting when the DOJ, CFPB, FHA, Fannie, Freddie or any regulatory agency bring charges against you. The time, effort and money required to investigate, review and defend such charges can get extensive and very expensive. Maybe Quicken’s actions will lead to more lenders defending their actions when they believe there is no substance to the claims being made against them. That may help to slow the tide of such activities.
To do so, lenders must ensure they have in place the employee training, systems, and tracking mechanisms to ensure they are manufacturing their loans correctly and compliantly. There is no substitute for quality.
- Are you confident that every employee in your organization is doing things correctly?
- Are they trained to understand, and operate in accordance with, the upcoming TRID changes?
- Do they know the effects of what they do and how important their role is to the overall success of the company?
Remember, your employees can harm you by acting incorrectly, not at all, or being a whistleblower. They can report wrongdoing directly to any agency or regulator.
If you do things the right way, you shouldn’t have any fears or problems. Everyone makes mistakes. When you find them, do what needs to be done to immediately correct them and make the changes needed to ensure they won’t happen again.
You must document all policies and procedures. Audit processes and people to ensure they know, understand and are following these policies and procedures, and are doing so in compliance with the law. Exceptions are an invitation to problems. Try to stick to the plan and when you deviate make sure you document the deviation completely.
Quicken feels comfortable in turning the tables on DOJ. Will you feel the same?