Boone v. Quicken Loans, Inc.

Summary

The South Carolina Supreme Court considered whether Quicken Loans, Inc. and Title Source, Inc. engaged in the unauthorized practice of law through a residential mortgage-refinancing process. The court held that the process did not constitute unauthorized practice because South Carolina attorneys independently supervised or performed critical steps, including title review, document review, closing, recording, and disbursement. The court therefore rejected the Special Referee’s recommendation and did not address the homeowners’ remaining class-certification and remedial claims.

Holdings

1. The Quicken Loans and Title Source refinancing process did not constitute the unauthorized practice of law because licensed South Carolina attorneys were involved at each critical stage and were permitted to exercise independent professional judgment.
2. To the extent In re Breckenridge could be read to require the closing attorney to use the attorney's own trust account to control disbursement of loan proceeds, that decision is modified. Attorney supervision remains required, but the supervision provided under Respondents' refinancing model satisfies the governing standard.
3. The Court did not reach the parties' remaining exceptions, including the Homeowners' requests to declare mortgages void and certify a class, because it rejected the finding of unauthorized practice of law.

Questions Presented

1. Whether Quicken Loans and Title Source's residential mortgage-refinancing process constituted the unauthorized practice of law under South Carolina law.
2. Whether the attorney involvement in title examination, preparation and review of instruments, closing, recording, and disbursement was sufficient to satisfy South Carolina's unauthorized-practice-of-law requirements.
3. Whether the Court should require a closing attorney to use the attorney's own trust account to control the disbursement of loan proceeds under In re Breckenridge.

Disposition

other