Detroit, Mich. – Feb. 24, 2011 – Based on the incredible unconscionable facts and events you will read below, Quicken Loans will certainly appeal this gross miscarriage of justice as well as ask federal authorities to conduct an investigation into all of the persons and parties in the state of West Virginia whose inexplicable actions have resulted in the irrational and incomprehensible result that will most assuredly be overturned.

The Facts
In May 2006, Lourie Brown (now Lourie Jefferson) filled out an online inquiry seeking to refinance her property. As a result of that online inquiry, she received calls from several lenders, including Quicken Loans (QL). Ms. Brown moved ahead with QL by completing a full loan application. When the full application was received at QL, Ms. Brown estimated the value of her property to be $250,000. This seemed reasonable based on the fact QL was provided an insurance certificate that this 4,200 square foot colonial located in Wheeling, WV was currently insured for over $374,000. Based on this preliminary information and an assessment of her goals and objectives, Quicken Loans proposed a loan in the amount $112,850 (or less than 50% of Ms. Brown’s own estimated value of her home).

After receiving Ms. Brown’s full application, an appraisal on the property was ordered from a local qualified licensed appraiser. The appraiser conducted a complete visual inspection of the interior and exterior of the property and determined that the market value of the property was $181,700, far below the value estimated by Ms. Brown on her loan application. Although the valuation was less than first estimated, the existing loan structure wasn’t impacted as the “loan to value” was still a relatively low 60%.

Processing of Ms. Brown’s loan continued. During this process, Quicken Loans discovered that Ms. Brown was actually not the legal owner of the property. Rather, the property was titled to her daughter, Monique Brown. Quicken Loans advised Lourie Brown that she needed to become an owner of the property evidenced by providing title that proves her ownership in order for QL to proceed forward with her refinance application.

Lourie Brown contacted the law firm of Bordas & Bordas (the same law firm that represents her in her lawsuit against QL and the appraiser) to prepare a deed adding her name to the title of the property, apparently, by having her daughter deed ownership to her which Ms. Brown then had delivered to QL.

As the loan approached its scheduled closing in June, 2006, QL then discovered Ms. Brown failed to make her mortgage payments on the current loan that was proposed to be paid off by the new QL’s refinance mortgage. Due to her mortgage delinquency (which is one of the most critical factors used in evaluating credit quality), Ms. Brown no longer qualified for the product she was originally approved for.

The new mortgage approval was conditional upon continued timely mortgage payments and her maintaining other standards of credit quality. Due to the deteriorated credit profile of the borrower, QL was now limited in the products it could offer Ms. Brown. Ms. Brown was offered the one product QL had available that allowed for a borrower’s existing mortgage to be delinquent at the time of funding of the new loan. At the same time, Ms. Brown requested that the loan amount be increased to its maximum so that she could receive more cash at closing. The underwriting guidelines on the new product did allow for her request and her new loan amount was increased to $144,800. The new terms and interest rate of the more flexible product were disclosed in writing to Ms. Brown, and she accepted and chose to move ahead and close.

The loan that was provided to Ms. Brown accomplished the following:

* Reduced her current interest rate. The QL loan was a lower interest rate than the mortgage loans that were paid off in the QL transaction.

* Decreased her monthly mortgage payment by over $300 a month from $1,460 to $1,144. ($3,792 annually)

* Provided cash from closing of nearly $41,000.

Ms. Brown was so upset with her treatment by QL that at closing she completed the standard Client Survey and ranked QL as “10 out of 10” for client service. Ms. Brown also ranked her Mortgage Banker as “5 out of 5” and hand wrote in 4 “pluses” after the highest ranking. Clearly, Ms. Brown was completely satisfied.

Ms. Brown made her first two payments on her new QL mortgage, then she stopped making any further mortgage payments to QL. Ms. Brown discovered the “flaws” in her loan (if any) once collection activities began. Ms. Brown then filed suit against Quicken Loans and the appraiser that performed the appraisal of the property on behalf of Quicken Loans.

As for the appraisal itself, there were indeed flaws. The “obvious flaws” in the Jefferson case only become visible once putting the appraisal (and the appraiser) under intense investigation. Quicken Loans, along with every other mortgage lender, puts considerable faith in the local licensed appraisers that are required to perform their appraisal tasks in a fair and objective manner. In this instance it became clear that the appraiser himself did a very poor job of carrying out his mission, with no coercion or contact from Quicken Loans whatsoever.

Due to the appraiser’s gross negligence, the appraisal firm agreed to settle their case with this same plaintiff for over $700,000.

It is baffling and completely unclear to QL why this appraisal firm would agree to settle (and apparently with their attorneys consent) to such an incomprehensible amount of damages in relation to a case where the plaintiff defaulted on their mortgage within 90 days of closing the loan and, in part, based on a significant amount of false information supplied by the borrower, and relied upon by the lender to approve and fund the loan.

In addition, the borrower took out a large amount of cash from the QL refinance, which she used to purchase luxury items including a new Toyota Avalon automobile. Even if one took the absurd position that Ms. Brown was somehow damaged by the erroneous appraised value of her home, how is it possible that this case could be settled by an amount nearly five times the total loan amount she borrowed in the transaction?

QL chose not to settle this case since there was nothing that the company did that would entitle Ms. Brown to more damages than the unconscionable amount of money she apparently received in her ‘settlement’ with the appraisal firm and it is Quicken Loans that was duped and frauded on this loan by the appraiser and potentially others.

In October 2009. a bench trial was conducted in front of Judge Arthur M. Recht in the circuit court of Ohio County. The judge conducted this trial after he approved the dismissal of the appraiser, knowing that the plaintiff received the still inexplicable $700,000 settlement from the appraisal firm. The judge found QL liable for $18,000, canceled the entire note and mortgage translating to an additional $144,000 to the plaintiff and waived several years of accrued interest of approximately $67,000.

Then, on February 17th, 2011, on top of the absurd awards and windfall above, Judge Recht issued an order awarding the plaintiffs punitive damages of an additional $2,168,868.75 plus attorney’s fees and expenses of an additional $596,199.89.

Let’s recap:

* Ms. Brown attempts to take out a $144,800 mortgage from QL on a property she does not even own.

* After obtaining title of the property from her daughter, she continues with the loan process and during that process stops making mortgage payments on her existing loan that part of the proceeds of the QL new mortgage eventually paid off.

* In addition to paying off the underlying existing in default mortgage with the proceeds of the QL new mortgage, $26,000 of other debts were paid off at the closing AND an additional $41,000 of cash was taken out at the closing by Ms. Brown, of which the majority was used for purchasing a brand new Toyota Avalon sedan.

* Ms. Brown defaults on the new mortgage after making only two monthly payments.

* Ms. Brown then sues both the independent appraiser, who issued a grossly negligent property value on her home, as well as the lender, Quicken Loans.

* Inexplicably, the appraisal firm settles the lawsuit with Ms. Brown for an unconscionable amount of $700,000 (an amount nearly 5X the total loan amount she borrowed in the transaction).

After the judge approved the preposterous $700,000 settlement from the appraiser to Ms. Brown, the same judge conducted a bench trial of Ms. Brown vs. Quicken Loans and he found for the plaintiff/borrower in an amount of $18,000 in damages and canceled the entire note and mortgage translating to an additional $144,000 windfall to the plaintiff and waived several years of accrued interest of approximately $67,000.

Here is the math:
$700,000 Settlement from the appraiser (5X the total loan amount)
$18,000 Damage award judgment against Quicken Loans
$144,800 Amount of mortgage balance forgiven ordering cancellation of the note and mortgage
$67,000 Waiver of approximately five years accrued interest due to the judge’s order canceling the note
$929,800 Subtotal of damages awarded
$2,168,868.75 Punitive Damages
$596,199.89 Attorney fees for the plaintiff
$2,765,068.64 Total ‘punitive’ and ‘attorney’s fees’
$3,694,868.64 GRAND TOTAL (25.7X the entire loan amount delinquent mortgage amount)

$3,694,868.64 in total damages to a single plaintiff in relation to a $144,800 mortgage amount in which she defaulted and stopped making her payments, 60 days from closing the loan.

Needless to say, QL will be appealing this wanton injustice and is independently conducting its own investigation as well as requesting that federal authorities also investigate the shocking and incomprehensible circumstances surrounding this scheme carried out by an unknown amount of people in West Virginia.

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