Bait and Switch?
Written: Mar 18 '06
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Pros: Ease of use with electronic paperwork.
Cons: Dishonesty, failure to update clients on potential changes, promises that are only speculation.
The Bottom Line: The supposed competition between banks online is small compared to local lenders. Stick to your own bank systems.
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| twinsfan's Full Review: Quicken Loans |
Until recently I had viewed myself in much the same light that other internet savy users do. That is, if I were to look long enough and hard enough, I could find absolutely anything at a discounted price on the Internet.
This too was my position when after several weeks of consulting local mortgage brokers, our local credit union, and then finally a barage of online lenders, while seeking a 30 year fixed rate mortgage for a first time home purchase, I settled upon using Quicken Loans.
My first call to quicken required me to immediately provide my SSN and other personal details to even be considered for any further information. I agreed to allow them to pull my credit as I had already had this done by several other lenders, and any credit pulls for a mortgage within a 14 day window only count once toward your credit score.
Thirty minutes later I received a call from on of Quickens bankers, who took further personal information including employment data, etc. and then called me back less than thirty minutes later with a "good faith estimate" of what Quicken could provide for me.
The loan package they had prepared was coming in with an interest rate of 6.25%, nearly 0.5 percent lower than any local bank had quoted. Our net payments were also going to be nearly 150 dollars lower each month, on a 225,000 mortgage, and we were told we would have the option to refinance at no cost during the life of the loan, and would have the option each month to pay interest only.
I made sure that I asked the same three questions I had asked every mortgage company I spoke to: 1) what will be our total payment, what will be the interest rate for a thirty year fixed rate loan, 3) what will be the total costs at closing.
The answers I was verbally promised over the phone were 1) 1575, 2) 6.25 percent 3)$3900 total at closing.
With this information I felt comfortable agreeing to the $500 good faith deposit that was required to process a loan application with Quicken.
Needless to say I should have read the reviews of others prior to this. After giving my credit card I received in two business days our loan application packet which I was asked to electronically sign.
The new package: $1700 a month payment without any principle applied, 6.875 percent interest rate (which would not be looked in even until closing) and closing costs in excess of $5300 dollars.
I tried several times to reach quicken to discuss this discrepancy, and I finally received an answer that rates had gone up (more than half a point in 2 days?) and that upon entering my information in the system I could not receive the low 6.25 percent I had been promised. Additionally our loan had been switched from a 30 year fixed to a 7/1 ARM loan.
I immediately called Quicken and told them to halt processing our application, and that I expected we would not be charged the $500 deposit since no loan application had been processed.
Since that time I have received calls from 3 different people, all leaving messages that they would like to complete the application and that they were "working with" the original banker who had promised the lower rate.
To date I have not been charged the 500 dollars and have expressed in writing and through oral contract that I do not wish to be charges the fee since no processing occurred.
On a final note, after receiving no information after 24 hours as to why the rates, payments etcetera were so dramatically changed I mentioned that I felt as though I was a victim of a "bait and switch" to the original banker I spoke to.
This promted the most attention and response I received throughout the whole process, as Quicken was quick to defend the "honesty" and ethics of their practice. Two principles I clearly feel were lacking in my interaction with them.
I wish to compliment the original banker I had worked with as she appeared to be genuinely interested in helping us, and like us was a victim of a system that through in various extra costs. I also feel that Quicken could be benefitial to the right customer still. But I would urge anyone considering this lending company to very clearly read all documents, and to never sign the documents electronically as they ask you to. (several documents changed after I had signed them, to which they replied this was common practice)
Recommended:
No
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Epinions.com ID:
twinsfan
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Reviews written: 1
Trusted by: 0 members
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