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MAINE BUREAU OF CONSUMER CREDIT PROTECTION

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State Shuts Down Mortgage Broker

 

 

 

A state regulatory agency this week revoked the license of a Saco mortgage broker, after finding that the broker exaggerated the income of his clients in order to improve their chances of obtaining loans.

The Office of Consumer Credit Regulation took the action against Capital Mortgage Group, Inc. and its owner, Randall L. Petit, after determining that Petit fabricated lease documents in an effort to show that his clients were receiving non-existent rental income.

Petit must cease operations, transfer all current files, and close the business by June 30, 2006, under the terms of a Consent Agreement signed with the State. He agreed to pay $5,000 in investigative costs and a $30,000 civil penalty. In addition, he is prohibited from operating as a mortgage lender or broker in the future.

Will Lund, Director of the state regulatory agency, said that borrowers were unaware of Petit's actions.

"In order to obtain loans for his clients but unbeknownst to them, Mr. Petit falsified lease documents," said Lund . "This fraudulent activity violated the legal standards requiring that loan brokers act honestly in their business dealings, not only with consumers, but with lenders and investors to which loan applications are submitted for approval."

Steve Rowe, Maine 's Attorney General whose office represented state mortgage regulators in bringing this action, warned other brokers against adopting Petit's methods of operation.

"With the mortgage market cooling off due to higher interest rates, brokers and lenders may be tempted to enhance the apparent credit-worthiness of borrowers," said Rowe. "The State will work hard to prevent those practices, and punish those who do not comply with the legal standards."

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The Maine Bureau of Consumer Credit Protection was established in 1975 to enforce a variety of credit-related consumer laws. The Office licenses lenders, creditors and collectors; conducts periodic examinations of creditors to determine compliance with state laws; and responds to consumer complaints and inquiries. The Office also conducts educational seminars and provides speakers to advise consumers and creditors of their legal rights and responsibilities.

Last Updated: February 3, 2014 1:41 PM