West Virginia Judge Fines Quicken Loans $2.7 Million

A West Virginia judge fined Quicken Loans more than $2.7 million in punitive damages and legal costs after finding the lender had defrauded a borrower by misleading her about her loan and using a property appraisal that inflated the value of her home by nearly 300 percent.

Judge Arthur Rechtawarded the borrower, Lourie Jefferson, nearly$2.17 million in punitive damagesafter finding that Quicken, the nation's largest online home lender, had enticed the 45-year-old practical nurse into a complex $145,000 mortgage that included a $107,000 balloon payment at the end of 30 years.

Dan Gilbert, Quicken’s founder and chairman,called thejudge’s fraud finding and damages award were “irrational and incomprehensible,”according to the Washington, DC-based Center for Public Integrity, which published an online investigation of Quicken's practices earlier this month.

The investigation included claims from both borrowers and ex-employees who accused Quicken of taking advantage of vulnerable homeowners and using bogus appraisals and other falsified information.

Gilbert denied the findings and took issue with the judge's verdict.

“If there was any injustice here,” Gilbert said, “it’s the other way around.” Quicken, he said, was the victim in this case rather than the borrower.

In a separate written statement, Gilbert said the mortgage had been a good deal for Jefferson because it reduced her interest rate and monthly payments and gave her more than $40,000 in cash. He said Quicken would appeal the verdict.