Quicken Loans Borrower Beware!!!! Internet, Internet

I guess my comments were misunderstood? Tagurit - Plano (USA) in my situation, the Quicken Loan frauds too my deposit of $500 and even though I contacted them immediately after discovering my mistake, they still ran through the amount on an overextended credit card that then put me into a situation of financial crisis. I explained to Abby Wynch - or wench would be a better word, that I needed the extra money to help me work on my house, and when the papers were reviewed, this amount was no where to be seen. I was new to this and did have a friend real estate broker check the papers - only it was too late. They spent no money on my situation, and except a credit report, which I cannot say they did or did not do? Besides, this amount should be part of their doing business with a potential customer given the product that they sell, defrauding in my instance, and not come from a deposit. If they did something, which they did not, then it would be an expense - but they laid no money out on my account since I sent them my credit report. Yes, I researched it myself. I find that the bank honored an amount over my limit, so they were complicit in my distress. I may have done things wrong, yet this does not change the fact that I and others have been taken advantage of by this company. I have since turned my issues around. I have been able to take away my PMI since even in these troubling times (of underwater properties) my property and home has doubled in value, and in this way I received my money back. I used an independent appraiser used by a credit union, and then used this to discharge the PMI. There was no appraisal completed by Quicken Loans. I then gained more work, I am in the position to be in demand and smart enough to earn as many extra hours of work as I am smart enough to find. So for a time I had two jobs, and worked many extra hours until I discharged the expenses that the Quicken loan would have helped alleviate - along with a cash out that was contained in the final paperwork. I was asked to hurry signing the papers if I wanted a Good Faith Estimate - and this was my fatal mistake - to expect any GOOD FAITH from this company! My last amount to pay off is the card company (that paid the deposit and would not reverse the charge on my behalf). I hope to have this paid off shortly. I am in a very good position and know many people that may have used this noxious company, but in their greed, they have created an enemy - I will never forget what they did to me. And since my job is as a speaker, to further reveal the nasty policies of this company to a broad array of people is very satisfying to me. I only need to explain exactly what happened to me to cause people to pause and rethink doing business with a company whose people are greedier than the lowest swine. I continue to lobby against this company using the facts and the actual emails that I received from the company. Maybe if Occupy Wall Street demonstrations would happen to this company and their offices, maybe even at the owners estate? Any damage possible could not happen to a better group of trolls!

OK  - I can admit when I make a mistake - I missed adding a zero.  If they take $500 for each loan app and do about 100,000 to 120,000 of those a year it's around $50M to $60M a year in revenue to them but again with over 1,700 employees that's still not NEARLY enough to support the company - in fact it doesn't even pay for all 1,700 salaries.  It's still clear as Dave pointed out earlier the real money is in closing the actual loan.   I think if folks want to blame Quicken they're going to have to use some other excuse than Quicken is doing it just to do them out of their $500.

Dear voice of reason:

Yes $8,700 seems very high.  But the real question should be - where is the breakdown in closing cost?   How much is for the title company, interest, PMI, taxes, etc. and how much was really the Quicken loan origination fee.   I dabble in real estate investing over the years and in every good faith estimate I've looked at regarding closing costs the title company is usually the one with the big #.   Closing costs will also be higher if the house is worth more.  

Bottom line - if the title company costs are too high, ask to use a different title company.  I don't know if Quicken would do this or not but has anyone asked?   I've moved to different title companies to get costs down so you have to shop around.

When I shopped around for rates for my refinance I looked at the whole picture including ALL closing costs.  When I compared companies I compared not only the rates but the section of closing costs that were the true fees back to the loan company.   Quicken charged me a whole $1070 in closing costs - all the other fees were title company and stuff outside of their control.   So, why blame them?    Oh that's right - because everyone would rather blame Quicken than take responsibility for doing their homework.

Did some additional research.  Checked on Hoovers which I have access to - unfortunately Quicken is a private company.   Shows 1,700 employees but looks like from their website that they do business through affiliates and so no way to know exact # of employees or total revenue.    One of their public competitors GreenTree Servicing with 1,800 employees posted $260M in revenues. 

Here is what I can best determine from the #'s posted on their website - if they are true. They state they funded over $29 billion in loans in 2010. Their website states they've closed 1,129,735 loans over the last 26 years.  That's not 1 million loans per year that's 1 million over a 26 year period.  So they are NOT charging $500 for 1 million applications because they don't take 1 million applications a year.  There is also a video from their VP fo customer service on Youtube that states they work with about 10,000 people on a daily basis and around 100,000 annually.   I'm going to try to back into some #'s using what is public thus far.  Someone else may want to add to or check my assumptions and my math.

Assumptions and calculations

- Loans on average take 30 days from start to finish - since that is the rate lock period - I've heard of some that take longer (60-90 days) but let's assume for now that the majority of loans are either closed/funded in 30 days or are turned down/denied in 30 days. 

-  They state they work with 10,000 people per month, so if it takes 30 days to get through the loan process they can at best only process/close 10,000 loans per month x 12 months which means best case they process/take 120,000 loan applications per year  - this is best case - likely it's around 100,000 as they mention in their video.

- Best case if they charged $500 for each of these 120,000 applications that only totals $6M  annually = this just confirmed they're not making their money off of charging the $500.  Why?  Because if they have 1,700 employees and are only making $6M a year off of charging people $500 that equates to revenue per employee of $3,529.41 and that is simply not a sustainable revenue model. 

Let's look at closing costs:

- Don't forget most of those closing costs go to the title company, appraiser, credit bureaus, etc.  Look at your good faith estimate. The average closing costs that go to Quicken as $ for their work is around $1070 - $1,400 if a those of you posting here have #'s that are significantly higher let me know (make sure to break out Quickens loan origination fees onlyl)  

- Let's assume they only close 65% of the loans.   That would be another $84,744,000 - OK NOW we're talking - clearly they make a lot more money if the CLOSE the freakin loan.  If they are receiving 1,400 in closing costs net to them after paying title company, etc. that's= 110,800,000 still not enough to be comparable on revenue per employee to their peer company Green Tree.   

So, the more realistic picture is that of the approximately 120,000 loan applications they take annually about 65% - 70% are approved - this puts the average loan value around $366,000.   If we look at where they are really making their money it's on originating actual loans and getting paid the loan origination fee + 1st month't interest.  Don't forget all those closing costs mostly go to the title company, appraiser, etc.  They only get a bit over $1400 per loan that is closed. 

So let's do a bit more math.

If they originated loans of $29 billion in 2010 they are taking 1st months interest and then typically selling the loan.   So if we look at what the average interest they are charging which I'm estimating at 5% on $29 B divided by 12 months since they only charge/keep 1 month = $120,833,333.   Here is where they are making their money.  If we add this to the origination fees they charge average 1,400 per loan which = $110,880,000 annually then we end up with a total company revenue of a bit over $230M annually not too far off from Green Tree and something that is likely far closer to the truth.

While I DONT know the % of applications to approved loans ratio the one thing that is CRYSTAL CLEAR HERE IS THAT QUICKEN ONLY MAKES MONEY IF THEY CLOSE A LOAN.  They make money off of origination fees and the first month of interest they charge before selling the loan.  Therefore, they are not denying loans just to get your measely $500 bucks. 

Bman - what I find amazing is that you expect a company to underwrite a risky loan.  That's exactly what you imply when you say they prey on those who can't afford it.   If someone can't afford their current mortgage payments I'm truly sorry for them I know a lot of people are having financial hardships in these times but that doesn't mean that Quicken should take that risk - they're in the business of making money not supporting loans that are underwater.   Yes that's harsh but let's not forget what got us in this mess in the first place.   Banks underwriting risky loans.  

Thanks for your post Voice of Reason.



I am on Rip Off Reports on occaision and on a lark entered Quicken Loans to see what would come up given that I had recently refinance with them.  Was a bit taken aback by the # of posts but upon closer inspection it seemed to me that most were in fact not the fault of Quicken.  



If you do some research you'll find I've posted previously on Rip Off in efforts to close down true scammers in one case getting a website for  Euro Direct Invest LLC shut down after I got a spam email from them offering a job.  When I looked it over (weekend so was playing around on the internet).  I found their server was located in Latvia and they had copied the pictures and bios from a legit company in Belgium called Bio Invest.   I notified one of their execs via email and they responded thanking me - they then put in their annual report a paragraph about how this internet company had stolen their executives images and biographies and Bio Invest managed to get the scam site shut down.



A few additional facts.  I'm a woman, I'm in high tech software sales, and I live in NW Plano TX.   More importantly I don't work for Quicken, never have, and have no affiliation with them - period.   I stand by my original post in that as I looked through the complaints it appeared to me that people did not have a realistic undertanding of the current value of their properties, their income to debt ratio's, etc.   While I think the banking industry in general is shameful - taking government bailout money, charging huge fees, poor customer service, underwriting questionable loans, etc. - I believe as consumers we have to do our homework up front.   Given the current economic situation, Quicken and other financial institutions need to ensure they are not underwriting bad loans - that's what got us in this mess to begin with.   Secondly, having a finance background before getting into software sales, I find it laughable that people believe that Quicken is getting rich off of charging a $500 fee to lock in their rate.  This fee is used to pull credit reports, perform appraisals, and to make committments on borrowing in order for them to fund the loan, and to pay for the people they have doing all of this work.  Some simple math makes it more than evident that Quicken is not getting rich off of the $500 fee.  



My only request is that people stick to facts and evidence not emotion.   If they think Quicken ripped them off then they need to provide a great deal more specifics than what I've seen posted here before I'm going to believe them.

First of all:
I do work for a mortgage company.  My job is to review credit apps, and determine if a person is eligible for a loan, and how much they can pay a month without the risk of defaulting on the loan.

I was reviewing your posts, and you made a post that stated that you built your house about a year ago.  So I think it is safe to say you attempted to refinance your loan after only 1 year.

On refinances, most banks will not touch a refinance unless the homeowner has 20% equity in his home.  I dont see how this is possible in your case, unless you never had a loan on your new home to begin with.  I sort of ruled that out, because in your original post you used the word "Refinance", so that leads me to believe you have a loan on the home now.

You were complaining about the low ball estimate on your home that Quicken's hired appraiser had quoted you.  Have you thought that your house may actually be worth that now?

Property values since 2008 have taken a huge tumble in most areas of the country.  This was due in large part to the Banks writing loans to subprime borrowers, with little or nothing down. 

For the most part these subprime borrowers were placed in ARM mortgages with a low teaser rate.  In 3 years those teaser rates would increase to a very high permanent rate, causing the mortgage payment to significantly increase.

Being that subprime borrowers are known for their ability to not pay their bills, when these ARM's readjusted, these home owners stopped paying, and the banks were left holding the bag!!!!

The homes were foreclosed, and the houses placed back on the market, thereby causing property values to fall even further.

Bank of America is experiencing such a crisis now.  In 2008 they bought Countrywide Mortgage (This bank was one of the biggest issuers of subprime mortgages, and wrote mostly ARM Mortgages).  Prior to their purchase in 2008 by BOA, Countrywide issued several billions in new loans, these were ARMS.  These ARMS readjusted this year, and now BOA is stuck with the bad debt.  Statistically 50% of the ARMS written to subprime borrowers end in default, and foreclosure.

That is going to have an even worse effect on property values.

My advice to you, is to keep paying your current mortgage, and do not refinance.  Wait until your home increases in value, and hope that mortgage interest rates dont increase.

Your comment that Quicken was making its income on the 500.00 fees they collect, and they dont have to loan out money, was a statement that came from your lack of knowledge about the Mortgage Industry.

Do some simple Math.  You finance a  150,000.00 house for 20 Years at 5%.  Just doing simple interest calculations that means that over a 20 year period of time, for just the first 5 years Quicken would make 7500.00 a year.   Over the life of the loan, Quicken would stand to earn 60,000.  I think earning 7500.00 a year for the first few years, is much better than earning a 500.00 onetime fee.  (By the Way most of that fee goes for running credit checks and paying for the appraiser to appraise your home).

Mortgage Companies do want to make money.  There is nothing wrong with a mortgage company wanting to make a profit.  There is a quote from a movie "Something worth doing is worth doing for money".

I mean you would not work for free would you David?

I hope this helps you to understand!!!

 
 

Voiceofreason, I can see your point and point well taken. 

Who cares IF you received a good experience from Quicken Loans?  This person and many others did not! I have a friend in the real estate business that checked on the company and they hoodwinked them as well. When the papers came in I was told that to lock in the great rate I had to leave a deposit which I did reluctantly, yet thought this was an upright company, just look at the press! I did not know about this site at that time and was suckered out of $500 when I could ill afford to lose the money - the reason I looked to refinance. I rescinded the contract almost immediately and because I signed they kept the money. They are a predatory company since they target the less fortunate, like myself in this instance, promise they will return money that comes out of their pay so fat chance this will happen. Then they give lower than market value for one's property using a source not indigenous to the community the home resides in - so it is scam. I am skittish about using any bank or company now to refinance given the hole this company single handedly put me in back in 2009. I have risen above the problem and now am changing my destiny, yet this company was heartless and cruel since it hit me hard when I was already down.  There is no compassion or concern for the customer here GIVEN MY EXPERIENCE with this
noxious company.

I am normally vociferous in putting down posters who insist rebuttals are the work of company shills or employees.
Sometimes, however, the charge is warranted. The OP got it wrong, the first rebuttal is obviously not a company hack. The last one before you and I however, stinks to me of affiliation of some sort.

As I asked that poster, how is it they just magically happened upon this post and rushed in to defend the company, from whom they too had been a happy customer?

That's my red flag - Miraculous stumbling upon a report by happy past customers. Frequent visitors to the site who have a habit of posting rebuttals are fairly recognizable. Of course this ex Quicken borrower might have just had nothing else to do at the moment and decided to read through reports for a kick, since that's what any number of others, like myself, could be doing at any given time.

I've never seen that poster on any other financially related reports, but if I'm wrong, then mea culpa.

I will also acknowledge the contra view, since I don't see responses on many past Quicken complaints, but a spot check shows at least a few have responses from, and back and forth interaction with supposed actual employees, so mighty, huge Quicken DOES monitor these reports.

But being an ex Quicken borrower, I'd be surprised if that person could even afford internet service anymore (heh heh), but then again, there's always free wi fi somewhere.

Why oh why is it that everyone who doesn't like the replies that they get automatically blather on about how the guy MUST work for this company and won't believe them when they say they DON'T work for said company.  Say for the sake of argument that they DO work for them......so what??  How would that change anything that you are doing with the loan company?  Do you have any idea how many people work for Quicken Loans? 

How and why did you miraculously come across this post about Quicken, and jump right in to defend them? Were you just strolling through the neighborhood one fine day and low and behold, found Quicken being mugged by this individual and rushed to save it?

That's what makes me believe you are Quicken damage control. $8700 in closing costs for a blasted home equity loan just sounds outrageous to me, and I have no problem believing they lie about refunding deposits should the loan be denied or appraisal come in too low. In fact, with all their database hookups for determining market value, they could probably come up with a decent appraisal estimate on their own right over the phone were they of a mind to. There's no excuse in this day and age to lead anyone on about what their home might be worth.

The only thing worse than a bank is a loan outfit, like Quicken.

Listen,

I had just built my home last year, so yes new what my home was valued at for my area,  appraisal's from QL are just outrageously low, Still waiting on a true response with Ratio of Applicants/Loan Closings, why should they finance when they make all this money without ever loaning the money to the people, Maybe you should look at the news on what the banks are doing!    And Yes I still say B/S on your reply you or someone has to be affiliated with QL in PLAN-O TX!!!!!!!!!! 

NO I do not have any affiliation with Quicken - you can email me at (((ROR redacted)))   I am a software salesperson who resides in Plano TX who refinanced my home in August of this year with Quicken.   I had a positive first hand experience with them and have done my homework.   If you are in fact right about your situtation why did you not get an updated appraisal.   I just get sick about companies who get bashed by consumers who DONT KNOW WHAT THE F they're doing and want to blame in on the company.  Why if the appraisal was so far off did you not get another appraisal - did you ever refinance with someone else.   Your's is the story that reeks of untruth.

CLICK here to see why Rip-off Report, as a matter of policy, deleted either a phone number, link or e-mail address from this Report.

You definitely have some affiliation with this ripoff company.

First, more than 98% of the complaints I see about Quicken have to do with low appraisals, not getting approved for the loan, etc.   Listen everyone - as consumers it is YOUR responsibility BEFORE contacting ANY loan company (Quicken or someone else) to make sure you know what your property is really worth - not what you think it is worth, what you payed for it, or what you hope it is worth - but what the MARKET WILL ACTUALLY PAY FOR IT.  If you have done your homework and the appraisal comes in low, discuss this with the lender and provide your backup documentation and request an alternate appraisal company.   Quicken will work with you if you have the proof their appraisal is way off base.

Secondly, you should know your credit score in advance and have a clear accounting of ALL of your assets, income, and debt.   Some simple calculations of debt to income ratios + your credit score will make it very obvious if you will even qualify for a loan before beginning the process.

I had this homework done in advance.   When I called Quicken to refinance I walked thru all of this with them IN ADVANCE to make sure expectations were realistic.  I was only off by $1,000 on the appraisal value of the home.   And, Quicken did not ask for $500 from me until AFTER we had gone through the math up front to make sure I would qualify.

Keep in mind that mortgage guidelines have altered DRASTICALLY over the last 3 years and that Quicken as any other lender must now ask for and provide a great deal more documentation on income, etc. before underwriting and approving ANY loan.   They are under no requirement to make risky loans to finance homes that are not worth the risk or to borrowers that have not proven they have the income or creditworthiness to handle the note.

While I had some challenges with Quicken - namely around my name/address being different on the forms submitted for the IRS transcripts, the reality is the #'s quoted to me initially were the EXACT numbers that went to closing - no surprises.   They closed within the 30 day rate lock period as they promised.   Their website was easy to use and to upload documents.   Was surprised with the amount of additional documentation I had to provide but I understand why given what happened to all the banks who underwrote risky loans putting us in the economic mess we're in now.

So - quit bashing this company because you didn't do your homework or expected Quicken to underwrite a loser loan.   Mortgages and refinancing is complicated stuff.

And - BTW I am NOT a Quicken employee but someone who has used them very successfully.  They were $70 cheaper on closing costs than any other company that I looked at.  You can reach me at (((ROR REDACTED))) if you don't believe me.

This toxic predatory company is still shafting people that cannot afford to lose $500 - AMAZING!