Quicken Loans sues California Department of Corporations.

Position:Business Alert - Brief Article

QUICKEN LOANS INC., LIVONIA, MICHIGAN, has filed suit against Demetrios A. Boutris in his official capacity as the Commissioner of the State of California's Department of Corporations (DOC). Quicken maintains that federal law takes priority over a California law that allows borrowers to use the mortgage lender's funds without interest until the mortgage is recorded. The suit was filed in the U.S. District Court for the Eastern District of California--Sacramento Division.

Mortgage lenders are permitted to begin charging interest as soon as the borrower has use of the funds, regardless of whether the mortgage has been recorded. "That's the common, acceptable practice followed everywhere else in the country," said William Emerson, Quicken Loans' chief executive officer. "The effect of the California law is to require lenders to treat California borrowers differently than borrowers in every other state and to unjustly require the lender to provide interest-free use of its money." The California law states...

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