Consumer complaint received 2021-07-23
Company: Rocket Mortgage, LLC
State: TX
Product: Mortgage
Sub-product: Conventional home mortgage
Issue: Closing on a mortgage

Complaint:
Sometime in either XXXX XXXX, a Quicken Loans representative solicited me to refinance my home to take advantage of the lower interest rate environment. I do not recall the representative 's name, but he also explained that there would be no money out of pocket as my closing costs would be rolled into the balance at closing. In further discussion, the representative explained this would be a traditional conventional refinance provided I was not planning to take money out of the home as I did in the previous refinance with Quicken. I moved forward and closed in XX/XX/XXXX. 

I recently applied for a HELOC only to be turned down because apparently my loan is considered a cash-out home equity loan per the disclosure on my Title. Though I have taken cash-out in the past, this current refinance was not ( to my knowledge ) a cash-out or home equity deal. However, I subsequently learned that my refinance was indeed considered a cash-out/home equity loan in accordance with Texas Constitution 50 ( a ) ( 6 ), and my loan could have been converted back to a Texas 50 ( f ) ( 2 ) conventional had Quicken offered such program. 

I immediately escalated within Quicken and was assigned to a resolution specialist, Ms. XXXX XXXX. During my conversations with Ms. XXXX, she immediately agreed that my loan was not a home equity loan or a cash-out. She went further to point me to my application and the HUD1 which supported this argument that my loan was not a home equity loan. Ms. XXXX informed me that she had many years in the mortgage lending field and Texas has very odd laws, but it was clear that my loan was a conventional fixed-rate loan. She stated that the closing documents containing the language, home equity security, were simply a formality and required by the state of Texas to be filed on any refinance, but it did not mean that I had a home equity loan. She further indicated that Texas forces them to use these instruments on refinance deals. She also stated that Quicken Loans does even underwrite home equity loans so there was no way for it to be considered as such. Ms. XXXX also went so far as to contact the XXXX Banker I was working with to explain that I did not have a home equity loan or take cash out. Apparently with all of Ms. XXXX ' years of experience, as she exclaimed, she was still unfamiliar with Texas law. 

Quicken Loans actively solicited me to refinance and led me to believe this was a conventional fixed-rate refinance. During the entire process, I was never informed by any Quicken Loans representative that my loan would continue to be considered a home equity loan in accord with Texas law. This should have been clearly disclosed to me when I was solicited and again throughout the process. I was misled and not properly informed of this nuance with the Texas requirements between a 50 ( a ) ( 6 ) and 50 ( f ) ( 2 ). I was led to believe that the home equity documents that I signed were simply mandated by the state of Texas but also assured that my loan was a fixed-rate conventional refinance.

It was incumbent upon the Quicken Loans agents to fully inform me of any situation that may result in me making a different decision, but I was not given this opportunity and I am sure there are recordings of all conversations. In this case, I was taken advantage of as the goal was to make a commission at my expense. This point is further highlighted from a response after I escalated my case to the Texas Department of Savings and Mortgage Lending. Quicken Loans VP, Mr. XXXX, admits that Quicken Loans does not even offer the option to remove the 50 ( a ) ( 6 ) ; hence, they do not have a program to underwrite a conversion back to a 50 ( f ) ( 2 ) conventional loan. I will further point out that Mr. XXXX 's response letter was somewhat demeaning to me as a customer. 

All of this leaves the following to question : 1. Why would Quicken Loan agents not disclose all options to Texas homeowners when soliciting their business?

2. Why do Quicken Loans agents admit they do not underwrite home equity loans, but this is what they underwrote for me in accord with Texas Constitution, 50 ( a ) ( 6 )? 
3. Why is Quicken Loans resolution staff with over 10-years of experience ( per Ms. XXXX ) unaware of Texas laws and was unable to explain to accurately explain to me what exactly took place with my loan? 
4. Why did any of the Quicken Loans staff inform me of my options as a homeowner in a state with very unique laws?

5. Quicken Loans staff also acknowledge that they do not underwrite conversions back to a 50 ( f ) ( 2 ) convention, so why are Quicken Loans agents soliciting Texas homeowners if all options availed under the Texas Constitution are not disclosed and/or provided by them? 

Quicken Loans was negligent in their solicitation by not informing a Texas homeowner, me, of all options under the Texas Constitution including the program they do not support, 50 ( f ) ( 2 ). They sold me on a conventional fixed-rate refinance and gave the impression that the home equity agreements were simply a formality as required by Texas. The fact that Ms. XXXX was also unaware of any of this, further indicates that the employees hired to solicit and even resolve post-closing issues are unfamiliar with Texas laws for homeowners. Lenders dealing with Texas homeowners should fully disclose all options available under the Texas Constitution and provide those services, not pick and choose. Otherwise, these lenders should not be allowed to solicit or underwrite mortgage loans for Texans.

Company response to consumer: Closed with explanation