The decision of C2 Financial to part ways with Quicken Loans is understandably a messy affair. And, it’s one that points to a larger issue facing the mortgage lending industry.
For now, originations are compressed, despite expected, strong economic numbers. While strange (economy up, but lending down?), it won’t always be this way. Lenders are now lining up clients for refis to come in the next two years or so. How they treat clients today, however, is the current point of contention.
Since publishing the Monday Morning Cup of Coffee, C2 Financial General Manager Brian Kent confirmed authorship of the memo stating their relationship with Quicken Loans will be terminated this week.
A spokesperson for C2, Ron Temko, sent the following to the newly formed trade group, the Association of Independent Mortgage Experts, on his personal experience in testing how Quicken treats homeowners — The same homeowners who originally took out mortgages at C2, but later had the mortgage servicing rights picked up by Quicken.
“Prior to sending out the [aforementioned] memo I called Quicken to refinance a C2 loan. They were given three 'overt' opportunities in my conversation to refer the loan back to C2. (i.e "Should I go back to the broker who brought me the loan, or should I deal directly with you?”) Each time the answer was “No, we will handle the loan,” according to an email reportedly sent from Temko to AIME.
"There was no system in place nor any effort whatsoever to do that. The goal of Quicken was secure the loan for themselves in that conversation. I believe if we had 100 of our loan officers make a similar call to Quicken for any one of their loans, all 100 calls would amount to the same result,” he said. This experience codified the decision to part ways with Quicken.
In several subsequent communications with HousingWire, Quicken said they are working to ensure that refis are first offered to the original LOs on the loan, and anticipate a roll out soon.
The CEO of Quicken Loans, Jay Farner, told me he’s already seen fallout from the impeding C2 decision.
"While we have not yet had the opportunity to speak with management, C2’s employees have been very vocal. More than 25 C2 loan officers have personally reached out to QLMS’ leadership team to express their extreme frustration over this seemingly rash decision," he said.
"As the C2 loan officers understand, this decision hurts them and their clients the most. It strips loan officers of the choice of connecting their clients with the lender that has the industry’s best service and extremely competitive rates."