Quicken Loans Predatory Lending Lawsuits and Fines

Quicken Loans, now known as Rocket Mortgage, has faced numerous lawsuits and fines for its predatory lending practices. The company has been accused of engaging in deceptive and unfair lending practices, including manipulating loan terms and failing to disclose fees.

In 2015, Quicken Loans was fined $3.3 million by the Consumer Financial Protection Bureau (CFPB) for pushing borrowers into costly mortgages. This fine was a result of an investigation that found Quicken Loans had failed to properly review borrowers' income and credit history.

The CFPB also found that Quicken Loans had charged borrowers excessive fees, including origination fees, and had failed to provide accurate information about loan terms. This led to many borrowers being placed in loans that were not in their best interest.

Quicken Loans has also been sued by several states, including New York and Maryland, for its predatory lending practices. These lawsuits have resulted in significant fines and penalties for the company.

Quicken Loans was penalized nearly $11 million for suggesting home values to appraisers, which is a clear violation of the state's Consumer Credit and Protection Act.

The class-action suit involved 2,770 consumers, who may have been overpaying for their homes due to the lender's influence on appraisers.

Quicken Loans will appeal the ruling, claiming the law firms involved are "predatory" and that the class is not truly aggrieved.

The lender also argued that appraisers are independent and that providing a borrower's estimated value did not affect their valuations.

However, the court concluded that appraisers may have been influenced by homeowners' suggested values, which could lead to overvaluation and disastrous consequences for consumers.

Quicken Loans' claim that the valuations issued by appraisers were not inflated and did not cause any damages to consumers is disputed by the law firms involved.

The law firms, Bordas & Bordas and Bailey Glasser, are confident that the ruling will stand and that Quicken Loans will be held accountable for its actions.

This case is the first of its kind, involving the objectivity of appraisals, and may set a precedent for similar cases in other states.

Quicken Loans' history of questionable lending practices is evident in a previous case where the lender approved a refinance loan for a woman based on an appraisal that was $136,000 higher than the home's actual value.

Quicken Loans is accused of lying about home values to guarantee loans for its users. This allegedly occurred from 2007 to 2011.

The company's speed in lending may have come at a price, as it is accused of fudging the underwriting process to give out bad loans. Quicken Loans is one of the top lenders of home mortgage loans.

The Department of Justice filed an FCA lawsuit against the company in 2015, alleging that Quicken Loans lied about borrower eligibility. This could have hurt taxpayers, as the mortgage loans were insured by the Federal Housing Administration.

Quicken Loans is a major participant in the Federal Housing Administration's insurance program. If a large quantity of its loans were fraudulent, that could mean immense losses for the American public.

A judge dismissed a portion of the lawsuit, only allowing loans from a two-year period to be included in the allegations. If Quicken Loans is found to have violated the False Claims Act, it could be fined three times the amount it allegedly defrauded.

Quicken Loans plans to fight the allegations all the way through rather than settling, unlike other large companies that have chosen to do so. The lawsuit is scheduled to go to trial in 2019.

Be cautious of lenders that are vague about their interest rates and fees, as this can be a sign of predatory lending practices.

Some lenders may try to hide their true intentions by using fine print or confusing language in their contracts.

Lenders that are unwilling to provide clear and transparent information about their lending practices may be trying to take advantage of you.

If you notice unusually high rates and fees, it's a red flag.

High rates and fees can be a warning sign that a lender is not being transparent about their true costs.

If you're refinancing, you have three days to change your mind, which is a standard consumer protection law.

A mortgage rate lock can protect you from market fluctuations, but you need to ask your lender about what happens if you don't immediately lock your loan rate.

Unusually high rates and fees can add up quickly, making it difficult to afford your loan payments.

If a lender is suggesting a value to an appraiser, it's just bad business. This can lead to a home being valued for more than it's actually worth, allowing a consumer to borrow more than the home's value, which can be disastrous if they want to sell at some point.

A lender may pressure you to accept a loan with unfavorable terms by saying you won't get a better offer from another lender. Don't fall for this. Talk to other lenders and obtain a copy of your credit report to compare offers.

Quicken Loans was penalized $11 million for suggesting home values to appraisers, which is a clear warning sign of a lender trying to take advantage of you.

A lender may claim that the loan will solve all your financial troubles. But nothing will solve all your financial woes until you stop spending money. Paying off credit cards through a mortgage just extends your troubles over a longer period of time.

The False Claims Act is designed to protect taxpayers from fraud, waste, and abuse of their hard-earned cash. Companies that deliberately or negligently violate the law can be forced to pay back what they owe and then some.

Mortgage fraud can have severe consequences, including devastating the entire economy, as we witnessed several years ago.

If you're considering a mortgage from Quicken Loans, be aware of these key takeaways:

Unsolicited mortgage offers are always a red flag, and it's best to ignore them.

You should never feel rushed in any way, such as being pressured to sign sooner than you're comfortable signing.

If a lender tells you "bad credit isn't a problem", encourages you to lie on your application, or otherwise feels emboldened to bend the rules, you might be dealing with a predatory lender.

Here are some warning signs to watch out for:

Don't be afraid to walk away if you sense any of these red flags. Your financial security is worth it.