Regarding your question, it’s true that Quicken Loans asks for a deposit when we begin processing a client’s loan. The deposit is almost always between $400-$700 – the amount depends on the type of loan and size of the loan. The deposit is a commitment on the client’s end to do business with us and used to cover expenses to process the loan. These expenses include a credit pull, a real estate appraisal (done by an outside company that Quicken Loans has no influence over – that’s an often misunderstood part of the process – we aren’t allowed to appraise property and cannot influence a final appraisal value) and other processing fees. When the loan closes, the deposit is credited back at closing as pre-paid. In other words, if the appraisal cost $250, that amount is paid and not due at closing.

The issues you’ve read about occur when a loan doesn’t make it all the way to closing. This can be for numerous reasons, the most common being the appraisal comes back lower than the client expected and then the terms of the loan have to change (more down payment needed, a higher mortgage rate, etc.). If the client refuses the new terms, the loan is denied and we return any remaining amount of the deposit minus any costs spent to that point. So if a client has had their credit pulled ($15) and an appraisal completed ($250) and gave us a deposit of $750, they would get $485 refunded ($750 deposit minus the $265 spent). This is unfortunately all too common in today’s real estate market, with lower values than just a few years ago.

The other situation is if a client backs out on their own because they found a lower rate somewhere else after locking their rate with us or for any other reason. If that happens, the deposit is not refunded because, as I noted earlier, it is a commitment to do business. We will offer the client a copy of their credit report pulled an any appraisal issued, but no money is refunded. The thing to keep in mind is that these terms are clearly explained before a deposit is issued and the client always signs an interest rate disclosure form which also clearly explains the policy.

We are doing all we can to work with clients to make sure they understand the process and never feel cheated. The truth is, we don’t make any money until a loan closes and ideally, 100% of our loans would close. In this real estate environment, that’s just not possible.

Just to put everything in perspective, we’ve closed over 750,000 loans in our company’s history and 94% of our clients tell us they recommend us to their friends and families. My goal is to get the thousands of happy clients we have each month online telling their stories to put the number of complaints in a context and show what a tiny percentage of our clients these complaints truly represent.

I hope this answers your question. Feel free to email me if you have more questions. Regarding appraisals, we recently launched a Quicken Loans real estate appraisal series on YouTube. We hope this gives folks more info on appraisals and helps them understand how they work.

Thanks and let me know if you have any more questions about Quicken Loans.

Clayton