Attorney General Brown Shuts Down Mortgage Scam Artists
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March 18, 2008
08-019 FOR IMMEDIATE RELEASE (916) 324-5500
LOS ANGELES—California Attorney General Edmund G. Brown Jr. today shut down Lifetime Financial, Nations Mortgage, Greenleaf Lending, Virtual Escrow, Olympic Escrow and Direct Credit Solutions, accusing the predatory lending companies of pushing homeowners into “illegal and unconscionable loans.”
Yesterday, the Los Angeles Superior Court, at the request of the attorney general, froze all the companies’ real estate and bank accounts and enjoined them from engaging in further predatory practices. The freeze order also included expensive cars and millions of dollars in private real estate owned by Eric Pony. Brown also seeks an estimated $20 million in penalties and restitution.
THE SCAM
Lifetime Financial, Nations Mortgage and Greenleaf Lending operate predatory lending schemes to cheat homeowners by promising unrealistically low mortgage payments and then switching them to loans that do not match the original agreement. Telemarketers lure consumers by telling them that they are preapproved for a fixed rate loan of 5% to 6% which could lower monthly payments by hundreds of dollars.
Other fraudulent and unlawful practices include the following:
• Offering thousands of dollars in cash back without disclosing that the money would be used to cover high fees
• Falsely promising to reimburse prepayment penalties from the victim’s current lender
• Pressuring victims to sign inaccurate loan documents by promising to correct excessive fees
• Failing to provide copies of signed documents
• Forging victims names and signatures on loan documents
• Falsifying income information on loan applications and creating fake references
• Refusing to honor written demands to cancel loans.
Abridged
SOURCE: agcalifornia
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