Quicken Loans Statement on Judge Goldsmith’s Ruling in Quicken Loans v. USA December 31, 2015 DETROIT, December 31, 2015 — Quicken Loans, the nation’s largest and highest quality Federal Housing Administration (FHA) mortgage lender, issued the following statement in response to the ruling of Judge Mark A. Goldsmith in the case of Quicken Loans v. USA et al: Quicken Loans is disappointed that Judge Mark A. Goldsmith has dismissed the well-reasoned claims made by Quicken Loans against the Department of Justice (DOJ) and the Department of Housing and Urban Development (HUD). Quicken Loans now intends to explore its options in its claims against the government while fighting to defeat the government’s retaliatory lawsuit wrongly alleging that Quicken Loans violated the ‘False Claims Act’ related to a minuscule cherry-picked sample of loans Quicken Loans originated with FHA insurance. “This temporary procedural setback does not deter Quicken Loans from exposing the truth about the DOJ’s egregious attempts to coerce unjust ‘settlements’ from its victims including Quicken Loans by using the guise of the heavy hand and power of the federal government in doing so,” said Bill Emerson, Quicken Loans CEO. By 2013, Quicken Loans had originated more than 250,000 loans with FHA insurance while maintaining the lowest default rate of all large lenders in the country, yet the DOJ and HUD still retroactively changed the rules and standards for evaluating the company’s FHA insured loans. Quicken Loans and other lenders no longer operate with any certainty as to the rules and standards for FHA lending, which is a significant and important segment of financing for the country’s housing market consisting of middle-class Americans and first-time home buyers. This is the reason why there has been a stampede out of the FHA program by numerous large banks over the past two years. The company will defend itself against the Justice Department’s baseless lawsuit. “We are confident that Judge Reggie B. Walton of the Federal District Court in Washington, D.C., will recognize that the proper venue for consideration of the government’s allegations is Detroit, the place where our loans are originated and every person expected to testify for Quicken Loans is located,” Emerson said. In filing its case in the Washington, D.C., court, the government made the ludicrous claim that its case should be heard there in part because Quicken Loans is a sponsor of a PGA TOUR golf tournament in the area, through which it donates extensively to a military charity and youth education centers. “It is hard to imagine that anyone could seriously make the claim that the venue for a lawsuit should be determined by the fact that one party sponsors a golf outing that benefits military and children near Washington, D.C.,” Emerson added. The dispute originated when HUD and the DOJ communicated to Quicken Loans that they had jointly assessed that 55 loans out of the 250,000 FHA loans the company originated from 2007 – 2013 did not comply with HUD and the DOJ’s interpretation of FHA lending guidelines. The goal of this methodology was to manufacture a hypothetical percentage of uninsurable loans – all without ever actually reviewing the loans individually. They then created a default rate and applied it to all of Quicken Loans’ FHA loans from the time period of which an insurance claim had been filed. Based on this faulty analysis, the DOJ attempted to coerce Quicken Loans to admit wrongdoing and to pay HUD hundreds of millions of dollars to “make them go away”. By using this ‘sampling’ scheme, the DOJ and HUD claim to have determined that “hundreds” of Quicken Loans’ FHA mortgages were not insurable even though HUD, in violation of its contract with Quicken Loans, did not actually look at the loans individually, did not afford Quicken Loans an opportunity to address the findings, and did not have each review conducted by a HUD employee with expertise in mortgage lending. Among the purported errors in the sample loans were allegations of a missing document – but the documents were, in fact, in the file. In another case, a client’s monthly income had been miscalculated by just $2.10, and in another Quicken Loans had provided a client $26 too much on a $99,500 loan. Quicken Loans worked for three years to remind HUD and the DOJ of their obligation to follow the loan-level review process as required by the FHA program regulations and contract. Quicken Loans originates the FHA’s best-performing loan portfolio in the United States. By the government agency’s own objective public reporting, the company has been – and is currently – ranked the highest quality (lowest default rate) lender of any large FHA originator. Through Quicken Loans’ participation in the FHA program, the government is projected to receive billions in profits, net of projected claims made, from the insurance premiums collected from the more than $40 billion in FHA home loan volume closed by Quicken Loans during the 2007-2013 time frame.