In the recent case against Rocket Mortgage and its parent Quicken Loans, eight homeowners have filed an amended lawsuit alleging multiple counts of fraud, along with violations of Truth In Lending Act (TILA). The lawsuit was filed in the U.S. District Court for the Central District of California against Quicken Loan Inc., among several others, and stems from numerous refinance contracts Rocket Mortgage entered into with the plaintiffs in 2017 and 2018. These contracts are alleged to have violated the Real Estate Settlement Procedures Act (RESPA).

The lawsuit states that Rocket Mortgage had manipulated the outlined process of submitting formal loan applications and approval, which allowed them to avoid applying stricter federal underwriting guidelines. Through this alleged process, Rocket Mortgage then identified potential borrowers with weaker financial profiles and misled them into believing they qualified for lower rates than they actually did. Furthermore, the complaint states that this meant that the companies consistently collected more funds than was necessary to close the loans, then kept the surplus funds under fraudulent pretenses.

Additionally, the Truth In Lending Act (TILA) is also claimed to have been violated in this case. The TILA sets forth consumer protection requirements and disclosures between lenders and borrowers. This act forbids lenders from crediting funds from a consumer transaction to any other purpose rather than himself, as well as requiring certain other disclosures to be made prior to a consumer transaction. By not following the established guidelines, Rocket Mortgage is not in compliance with revising disclosures and obtaining consent from their customers and is therefore guilty of violating the act.

The plaintiffs are now seeking damages, alleging that Rocket Mortgage’s business practices resulted in the loss of thousands of dollars in the form of illicit transfer, legal fees and other costs associated with the violations. The complaint is aiming to provide reparations and a cease and desist of Rocket Mortgage’s current practices in regards to the Truth In Lending Act violations, as well as civil penalties. The case is still ongoing, with no concrete resolution as of yet.

You can read this full article at: https://www.housingwire.com/articles/rocket-faces-amended-refi-lawsuit-with-fraud-tila-violation-claims/(subscription required)

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