Quicken Loans Not Engaging In Unauthorized South Carolina Practice

The South Carolina Supreme Court absolved Quicken Loan on civil allegations of unauthorized law practice

We accepted this declaratory judgment matter in our original jurisdiction to determine if Respondents/Petitioners Quicken Loans, Inc. (Quicken Loans) and Title Source, Inc. (Title Source) have engaged in the unauthorized practice of law (UPL). In their complaint, Petitioners/Respondents Vance L. and Thelma Boone, Travis G. and Theresa S. Messex, and Brian and Kelli Johnson (collectively “Homeowners”), alleged the residential mortgage refinancing model implemented by Quicken Loans and Title Source in refinancing the Homeowners’ mortgage loans constitutes UPL. In addition to seeking declaratory relief, Homeowners’ complaint also sought class certification and requested class relief.

We referred this matter to a Special Referee to take evidence and issue a report containing proposed findings of fact and recommendations to the Court regarding the UPL issue, as well as on the issues of class certification and class relief. Following an evidentiary proceeding during which the parties submitted extensive testimony and documentary evidence, the Special Referee issued a report proposing various factual findings and recommending this Court declare that Quicken Loans and Title Source engaged in UPL but opining that neither class certification nor class relief were appropriate under the circumstances. Quicken Loans and Title Source took exception to the Special Referee’s proposed findings of fact and UPL recommendation. Homeowners took exception to Special Referee’s recommendation that class certification and class relief were unwarranted under the circumstances.

No UPL

We find the record in this case shows licensed South Carolina attorneys were involved at every critical step of these refinancing transactions, as required by our precedents. We also find that requiring more attorney involvement would not effectively further our stated goal of protecting the public from the dangers of UPL. We therefore respectfully reject the Special Referee’s conclusion that Quicken Loans and Title Source committed UPL. Because we reject the finding of UPL, we need not address the parties’ ,remaining exceptions, including Homeowners’ request that we declare their mortgages void and certify this case as a class action.

…we believe requiring more attorney involvement in cases such as this would belie the Court’s oft-stated assertion that UPL rules exist to protect the public, not lawyers…we do not believe requiring more attorney involvement would appreciably benefit the public or justify the concomitant increase in costs and reduction in consumer choice or access to affordable legal services. Cf. In re Unauthorized Practice of Law Rules, 309 S.C. at 306, 422 S.E.2d at 124–25 (recognizing the strict licensing requirements for becoming a Certified Public Accountant (CPA) and holding “that allowing CPAs to practice in their areas of expertise, subject to their own professional regulation, will best serve to both
protect and promote the public interest”).

(Mike Frisch)