Quicken Loans / apparent bait and switch
In my dealings with Quicken Loans here's what I've concluded is the major problem: They do not offer to send you a Good Faith Estimate that includes the loan amount, term, rate and the closing costs <b>BEFORE</b> they ask you to provide the $500 deposit to start the loan. What appears to happen then is the old <b>bait and switch</b>. Meaning, the consumer pays the $500 then, later in the process, the consumer receives loan paperwork with loan info or closing costs different than what was originaly quoted. And guess what, if the customer then decides to cancel, Quicken Loans keeps your deposit. <b>THEREFORE, DO NOT PAY ANY DEPOSIT UNTIL THEY SEND YOU A GOOD FAITH ESTIMATE.</b> However, this only offers some protection because if the costs or loan info comes out different after you've paid the deposit, the Quicken Loans deposit refund policy don't state that that the deposit will be refunded in these cases.
Anyway, below is a letter I wrote to the president of Quicken Loans and his executive team about my dealing with them. At the end of the letter, I've provided the email addresses of the Quicken Loans executive team.
QuickenLoans Executive Team,
While I appreciated the call from your Corporate office yesterday to respond to my e-mail complaint of 1/8, I'm still very concerned about Quicken Loans' lending practices. If your company listens to the recording of my conversation with your representative, you'll confirm the following:
<b>1) The representative told me that there was no way to find out what were the best rates offered without pulling my credit reports.</b> Because I didn't want a needless credit inquiry on my credit report (which lowers my score) I asked him if there was a way to simply tell me what would be the best rate offered by Quicken Loans with someone with good credit. (Other mortgage companies I've shopped were able to do this - of course with the understanding that the rate may be sightly different once they ran the credit, if I decided to go forward). The representative said this was not possible because the computer generates the rates once the credit score is populated. Based on my experience and my point #2 below, I don't believe this. Needless to say, I now have a wasted credit inquiry on my credit report to receive a rate that I would not have chosen had I known it up-front. Which leads to the next point.
<b>2) The representative quoted me an incorrect rate.</b> For a 30 year fixed, he quoted me the 0 point rate and a rate of 4.375% with 1 point. (The next day when Quicken Loans Corporate checked in response to my complaint, that rate did not exist - the rate was in fact 4.375% with <b>2</b> points.) On the call with the representative, I entered the 1 point rate into an Excel spreadsheet and I read him back the calculated results of what the point would be and the resulting loan balance (which included the point). The representative agreed with my calculation. I also discussed with him the comparison of the 1 point cost to 0 point option as it relates to the No Cost Refinance option. Therefore, if he had incorrectly given me the wrong point information, he had multiple times during the conversation to realize his mistake. Also, I asked him to send me an e-mail with the rates he quoted me, and he did, however, he only included the 0 pt rate - not the 1 point rate. Therefore, because he didn't include this rate in his e-mail, this strengthens my conclusion that the Quicken Loans representative purposely quoted me a lower rate to get me to "commit, " and this commitment had to be in the form of the non-refundable $500 deposit. Which leads to the next point.
<b>3) Both the representative and his supervisor told me that the $500 Good Faith Deposit was non-refundable under any circumstances.</b> (When you listen to the phone recording, you'll hear the supervisor telling me this.) Of course this information is incorrect. So, had I acted on the incorrect rate information the representative gave me, and paid the $500 non-refundable fee, I would have been surprised when I eventually (this is the operative word) received the loan paperwork showing a 4.375% loan with 2 points - versus 1 pt. Once I would have seen this error, I would have, of course, asked to cancel the deal, and then I would have been informed that I would not be able to get my deposit back. This scenario seems to match other scenarios that have been reported on the Internet by other dissatisfied Quicken Laons customers. If Quicken Loans followed a process where the customer was able to receive and review a document containing the quoted rate plus all closing costs, many of your bad customer experiences would be eliminated. Which leads me to my last point.
<b>4) I was not able to get properly documented loan and closing cost information before being asked to pay the non-refundable deposit.</b> When I asked the representative to send me information on what he had communicated to me, he stated that he didn't want to spend time putting together information unless I was "committed" to the loan. (With commitment being paying the $500 deposit.) In fact, I was later informed by Quicken Loans that they were "passing on my business" due to me asking for additional information. This is counter to proper industry practices. Prospective borrowers should, per RESPA, receive a Good Faith Estimate (GFE) that details the loan and closing cost information before they commit to entering a loan. Yesterday, Quicken Loans Corporate stated that the Quicken Loans process does include sending a customer the GFE before asking for the deposit. However, in the "Seven Step Process" on the QuickenLoans website, there is absolutely no mention of the consumer receiving documentation of the loan information or closing costs before the application process starts. (Please see Attachment A at the end of this e-mail for my suggested changes to the Quicken Loans website and practice.) Therefore, if the official, documented process doesn't include this step, how are the front-line representatives expected to follow this process with customers? (Additionally, I saw a post on the Internet where a Quicken Loans employee complained that they had to prepare GFEs after hours. If this is the case, it appears then that representatives do not have the ability to send a customer a GFE while they are on the line with a customer for the first time?)
In sum, as you'll see from my points above, there are a litany of mistakes and erroneous practices uncovered in just one phone call with Quicken Loans. This could be indicative of poor training, or it could be a result of a corporate management style that emphasizes volume and revenue over accuracy and customer consideration. Regarding the latter, it was unscrupulous mortgage banking and lending practices that caused many of the financial problems this nation is currently facing, and sadly, it appears that companies in the mortgage industry remain more focused on their bottomline than ensuring that the same mistakes are not made again.
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