WHEELING – A statutory penalty of nearly $11 million was imposed on Quicken Loans by a federal judge in a class action lawsuit.
The court's order imposes statutory damages of $3,500 per violation of the West Virginia Consumer Credit and Protection Act by Quicken Loans, which extends to each of the 2,770 class member loans in the 2012 lawsuit.
District Judge John Preston Bailey further awarded $968,702.95 in damages resulting from Quicken's breach of contract.
The case arises out of Quicken's practice of suggesting values to appraisers that were conducting appraisals of homes for Quicken Loans as part of its mortgage lending practices.
The order states that Quicken has “to this day never offered any legal or industry source that would indicate that suggesting values to appraisers was considered a best or even valid lending practice."
Bailey had previously entered an order in the case in 2016 in which he found that Quicken's uniform practice of providing estimated home values to appraisers constituted unconscionable conduct under the West Virginia Consumer Credit and Protection Act.
The order criticizes Quicken's conduct as being fostered and condoned by the highest levels of management and "motivated by greed."
Bailey's order states that Quicken's conduct “jeopardizes the American dream of homeownership" and further states that the conduct was "truly egregious, in that it flew in the face of prudent lending practices for the benefit of Quicken's bottom line, and at the expense of each borrower's right to a fair and unbiased appraisal."
The court further ordered that pre-judgment interest be paid from and after June 15, 2012 to the present.
The class is represented by Jim Bordas and Jason Causey of Bordas & Bordas; and Jonathan Marshall and Patricia Kipnis of Bailey Glasser.
“Judge Bailey entered an extensive and detailed Order which makes it clear that conduct of the nature exhibited by Quicken Loans is unconscionable and needs to be deterred,” Bordas said. “We are proud of the work that we have been able to do on behalf of the nearly 3,000 West Virginians who were victimized by these practices.”
U.S. District Court for the Northern District of West Virginia case number: 5:12-cv-00114