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Friday, February 4, 2011

Quicken Loans Being Sued By Former Employees Alleging Predatory Lending Practices

Posted By on Fri, Feb 4, 2011 at 2:54 PM


Dan Gilbert maintains a pretty squeaky image. Good man, cares about the city, has built his millions from scratch, and his companies are places that are regularly ranked as super-duper great places to work. Quicken Loans, in particular, is touted not only as a good company for employees, but a good company for America.

Of course, it's a lending company, and despite Gilbert's claims that Quicken isn't like those nasty banks that suckered poor Americans into sub-prime loans, it appears all isn't rosy, and in fact, that Quicken was just as slimy as the rest of the bunch.

A trial begins next week involving several former employees who are suing Quicken Loans for withholding overtime pay and accusing the company of "bullying homeowners into high-interest-rate loans or otherwise inflated mortgages," according to Deadspin.

Among other things, Quicken's employees were taught to "bruise" customers by identifying credit report red flags, then telling potential borrowers they wouldn't get loans elsewhere. In one fraud case decided last year, Quicken was found to have slapped a balloon payment of $107,000 on the end of a $145,000 loan, after 30 years. And Quicken issued that $145K loan despite a bogus appraisal that tripled the home's actual value.

The Center for Public Integrity has much more in a lengthy summary of the various charges. Here's a snippet:

Lawsuits from borrowers and ex-employees claim Quicken’s day-to-day tactics are at odds with its squeaky clean image. They accuse the company of using high-pressure salesmanship to target elderly and vulnerable homeowners, as well as misleading borrowers about their loans, and falsifying property appraisals and other information to push through bad deals.

Last February, a state court judge in West Virginia found that Detroit-based Quicken had committed fraud against a homeowner by misleading her about the details of her loan, charging excessive fees, and using an appraisal that exaggerated the value of her home by nearly 300 percent. The judge called the lender’s conduct “unconscionable.”

And with that, expect Prince Gilbert's image to crash just a little more.

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