Quicken Plans to Change Loan Disclosures
WASHINGTON (AP) _ Quicken Loans Inc. has settled government charges that it failed to notify thousands of customers who completed online mortgage applications that they had been denied preapproval because of bad credit reports.
Applicants for online preapproval letters from Quicken, a lender based in Livonia, Mich., who passed a credit check would get e-mails that they were preapproved for loans. People with low credit scores or other problems with their applications would get e-mails advising them to contact Quicken loan consultants for more information.
Some of the applicants would receive loan approvals not available through the online process, but those who did not follow up with consultants would not be contacted again by Quicken.
Quicken argued that it was not rejecting the applicants based on their credit reports but was asking them to call the company for further steps in the application process. The company said it agreed to settle the Federal Trade Commission’s case without fines and change its procedures to avoid the cost of a legal fight.
Quicken spokeswoman Elizabeth Jones said the process was discontinued in March 2001 for technical reasons not related to the government inquiry and the settlement will not affect the company’s current practices. She said the company does not have records of how many applicants did not get preapproval letters during the online application process.
Bradley Blower, assistant director in the FTC’s Bureau of Consumer Protection, said the number was ``in the thousands.″
Blower said consumers have a right to know if they have negative credit reports so they can correct mistakes or try to improve their scores. He said the Quicken settlement will give guidance to other lenders about how to notify customers clearly.
On the Net: http://www.ftc.gov/