Judge orders Quicken Loans to pay $11 million in fines and damages

< img data-hi-res-src = https://img.washingtonpost.com/rf/image_1484w/2010-2019/WashingtonPost/2017/02/22/RealEstate/Images/AP_515215600925.jpg?uuid=oI4tUvlWEeaqHl9zXuMTNA data-low-res-src = https://img.washingtonpost.com/rf/image_480w/2010-2019/WashingtonPost/2017/02/22/RealEstate/Images/AP_515215600925.jpg?uuid=oI4tUvlWEeaqHl9zXuMTNA data-raw-src = https://img.washingtonpost.com/rw/2010-2019/WashingtonPost/2017/02/22/RealEstate/Images/AP_515215600925.jpg?uuid=oI4tUvlWEeaqHl9zXuMTNA src = https://img.washingtonpost.com/rf/image_60w/2010-2019/WashingtonPost/2017/02/22/RealEstate/Images/AP_515215600925.jpg?uuid=oI4tUvlWEeaqHl9zXuMTNA > A court fined Quicken Loans $11 million in an appraisal case. (Uli Deck/Uli Deck/AP IMAGES)

Quicken Loans probably has the mortgage market’s most squeaky-clean image– named by J.D. Power as No. 1 in home mortgage client complete satisfaction for seven years in a row and No. 1 in loan maintenance for 3 years directly. It also has a credibility as a technology innovator: See its greatly advertised and popular “Rocket Home loan” option that cuts time and red tape for applicants.So it might come

as surprise that a federal-district court last week imposed almost $11 million in fines and damages against the company for homeowners who the court said were victims of a supposed appraisal-tampering scheme by Quicken throughout the real estate boom and bust years in West Virginia.The court discovered that Quicken supplied appraisers advance

“price quotes “of residential or commercial property values in assignments on house financings, effectively communicating the amounts Quicken had to money the loans. Plaintiffs in a class-action match affecting 2,770 property owners said appraisers working for Quicken had actually overstated the marketplace worth of their residential or commercial properties, putting them undersea on their loans from the start. One couple stated in the original problem that Quicken’s appraiser had reported their residential or commercial property deserved$151,000, substantially higher than its real worth of$ 115,500. The court figured out that Quicken’s practices constituted “unconscionable” conduct under the West Virginia Customer Credit and Protection Act. “When an appraisal is polluted by the ramification of impact over the appraiser, especially by the party compensating the appraiser, “the court stated,” the resulting appraisal can not by any established standard be fair, legitimate and reasonable.” The court likewise found that by”hiding”its actions, Quicken”deceived the complainants.”U.S. District Court Judge John Preston Bailey called Quicken’s conduct” really egregious “because it” contradicted sensible financing practices for the advantage of Quicken’s bottom line.” In a statement for this column, Quicken strongly disputed the court’s conclusions. The business said that it prepares to appeal the decision which”there is no proof”that the arrangement of quotes of value in advance”impacted the opinion of local independent, licensed, professional home appraisers in West Virginia.”Quicken added that”there is also no evidence that the valuations the appraisers issued at the time were pumped up in any way or triggered any damages whatsoever to a single plaintiff in the class. The truths of this case are clear and we are confident that both the judge’s judgment and the damages examined will be reversed on appeal. “David Stevens, president and president of the Mortgage Bankers Association, defended Quicken, a popular member of the trade

group, arguing that”it was a typical market practice throughout the time these loans were made to offer [an] owner’s price quote of worth to appraisers, till the law changed across the country in 2009. “But was providing advance estimates of value a prevalent industry practice back then? Appraisers I spoke with had varying viewpoints on the matter.Lori Noble, an appraiser with Real Residential or commercial property Consulting Group in Charleston, W.Va., informed me that”I never saw other business do it”– that is, include “owner’s quote” dollar figures to appraisers together with order forms providing the project of work.But Pat Turner, an appraiser in Richmond, Va., said during the boom years, prior to federal appraisal reforms were enacted, loan providers and loan officers weren’t shy about revealing the target worth they needed to close a loan.

In truth, he stated, they got their message across much more candidly than merely identifying the number needed as an”owner’s estimate.”Significant lending institutions” in fact supplied [appraisers] with the figure needed to make the deal work, “he stated. Frequently there was no subtlety about it. Some loan officers”would call appraisers and say,’If you cannot make the worth, don’t do the appraisal.'”And if the appraiser told the loan officer that there was no way he or she might hit that value, the loan officer would threaten to withhold future projects.”If you do not make value, you will never get another offer from us,” they would state, inning accordance with Turner.So what to make of this choice, which touches on one of the most delicate concerns in genuine estate?Clearly this case is not over, given Quicken’s plans to appeal. The final judgment is not in. It illustrates a fundamental point: Customers anticipate and pay for precise and independent valuations of their homes and the equity they have in it, completely free of outdoors impacts, from any source.