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Mortgage Company Agrees to Stop Misleading Banks
January 18, 2008
Today, Attorney General Steve Rowe announced that Maine Mortgage Group of Scarborough, ME, a licensed mortgage loan broker, has entered into a Superior Court Consent Decree which resolves the State’s Unfair Trade Practice Act Complaint. The State charged that Maine Mortgage Group helped falsify a homeowner's mortgage application in order to persuade the lender that the homeowner was a good loan risk.
The State’s Complaint alleged that Maine Mortgage Group made a $7,000 short-term loan to the homeowner in order to make the homeowner’s assets appear larger than they actually were. “This type of deceptive behavior is one of the causes of the current housing crisis.” Rowe said. “Falsifying loan applications has resulted in many homeowners receiving loans that they cannot afford, eventually resulting in foreclosure”
Pursuant to the Court’s Order, Maine Mortgage Group must cease making such deceptive loans and provide restitution totaling $3,615. They must also pay a $5,000 civil penalty. The Consent Decree states that Maine Mortgage Group does not admit to any wrongdoing.
“Homeowners in debt are often desperate to refinance their homes to get cash out.” said Attorney General Rowe. “Obtaining a mortgage that a homeowner cannot afford often leads to tragic consequences. Loan brokers should never assist a homeowner in misleading a bank to believe that the loan application is sounder than it is.”
David Loughran, (207) 626-8577