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Two homeowners say Quicken Loans has been getting away with overcharging interest on home loans insured by the Federal Housing Authority.
Plaintiffs Kristen Rogers and Claire Davis claim defendant Quicken Loans has improperly collected hundreds of millions of dollars in excess interest by failing to make a mandatory disclosure required by the Federal Housing Authority.
This alleged lack of disclosure has caused tens of thousands of borrowers to overpay their loans by paying interest improperly applied to periods after the principal was paid off, the plaintiffs claim.
According to Rogers and Davis, post-payment interest is interest that a lender collects after the borrower has paid off the principal in full. This collection can happen when, for example, the borrower finishes paying the principal in the middle of a calendar month, yet the lender collects interest for the entire month. The interest linked to the remainder of the month after the borrower’s payment would be considered post-payment interest.
Rogers and Davis argue that the collection of such post-payment interest is contrary to the uniform provisions that the FHA requires to be included in promissory notes for FHA-insured loans. These provisions allow interest to be charged on unpaid principal, but they also require interest charges to stop once the full principal amount has been paid, the plaintiffs say.
As an exception to that rule, lenders may be allowed to collect post-payment interest for the remainder of the final month of payment if the borrower makes the final payment on a day other than the first of the month and if the lender provides the borrower with an FHA-approved form that asserts the lender’s right to collect post-payment interest.
The plaintiffs say Quicken Loans doesn’t bother to use this FHA-approved form. They accuse Quicken Loans of removing material information from this form.
The resulting form “does not fairly disclose to borrowers that it is in their best financial interest to make a payment for the full unpaid principal on the first of the month,” the plaintiffs say. By failing to properly inform their borrowers, the plaintiffs claim, Quicken Loans has collected “hundreds of millions of dollars in post-payment interest.”
Rogers and Davis seek to represent a plaintiff Class consisting of all persons who held a loan that financed real property in Georgia, that was insured by the FHA between Aug. 2, 1985 and Jan. 20, 2015, that was held by Quicken Loans on the day the full principal was paid, and on which Quicken Loans collected interest for any period after the date the principal was paid.
They are asking the court to award compensatory and statutory damages, attorneys’ fees and court costs, all with pre- and post-judgment interest, along with any other relief the court deems appropriate.
The two plaintiffs are represented by attorneys Archie I. Grubb II, W. Daniel “Dee” Miles, Andrew E. Brashier and Rachel E. Boyd of Beasley Allen Crow Methvin Portis & Miles PC, and Matthew Q. Wetherington, Michael L. Werner and Robert N. Friedman of The Werner Law Firm.
The Quicken Loans Overcharged Interest Class Action Lawsuit is Kristen Rogers and Claire Davis v. Quicken Loans Inc., Case No. 1:17-cv-01781, in the U.S. District Court for the Northern District of Georgia.
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25 thoughts onQuicken Loans Class Action Says Borrowers Charged Excessive Interest
Quicken Loans has been a night mare….they did not pay the taxes on our home for our home for 4 years…We paid the taxes, they are charging too much for…then we made 6 payments minus the taxes and they filed foreclosure and are holding our mortgage hostage,,,cliaming I was on the mortgage from 2011 to present when I was not on it until afer my dad died I signed on 2016..Please add me to this law suit..They cliam I missed payments when I have not..