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Attorney General Sues Mortgage Lender
October 5, 2007
Attorney General Steve Rowe filed a suit against Downeast Mortgage Corporation, Commercial Street Capital LLC, James Lindvall a principal in both companies and Catherine Campbell a loan officer for engaging in Unfair and Deceptive practices in making commercial loans to finance the sale of a single family residence. The matter was referred to the Attorney General by William Lund, the Superintendant of the Bureau Consumer Credit Protection.
“This case is illustrative of some of the pernicious practices that contributed to the current foreclosure crisis. Mortgage companies should not steer consumers who do not qualify for mortgages to more risky products lacking consumer protections” said Superintendant Will Lund.
The Attorney General’s complaint states that in late 2005 Kyle and Melissa Wilkinson applied for a home mortgage loan with Downeast Mortgage. When they did not qualify for a home loan, Downeast and its employees steered them to a commercial loan. The companies and the Wilkinsons created a commercial LLC, KW Properties, for the sole purpose of entering into the loan transaction. The lenders and the Wilkinsons also persuaded the Wilkinsons’ aunt and uncle to guarantee the commercial loan without explaining the terms of the guaranty. The loan is now in foreclosure.
“Mortgages loans should only be made when the consumer qualifies, is informed of the terms and has the ability to repay the loan.” said Attorney General Rowe.
The Office of the Attorney General worked with Legislators, industry officials and the Bureau of Consumer Credit Protection to enact legislation to protect consumers from predatory loans. The law, an “Act to Protect Maine Homeowners from Predatory Lending” (Chapter 273 of the Public Laws of 2007), will be effective in January of 2008.
Attorney General Rowe’s Office partners with the Bureau of Consumer Credit Protection, Pinetree Legal and others to investigate unfair practices in connection with home mortgages and to assist consumers who are in foreclosure due to these practices.
Linda Conti, Assistant Attorney General, (207) 626-8591 David Loughran, Special Assistant to the Attorney General, (207) 626-8577