Authorities in Maine shut down a mortgage lending outfit after its president allegedly misused application information.
The state's Office of Consumer Credit Regulation announced their action against Colonial Mortgage Corporation of Portland Wednesday. The company's lending license will be revoked permanently on June 20, according to an agency statement.
Authorities claim that Colonial's president, Aaron Lewis, rifled through loan applications, paying close attention to confidential financial information.
"He used that information to identify consumers who had sufficient monetary resources, and then convinced those consumers to make loans to him," said agency director Will Lund. "Lewis then failed to repay many of the loans as promised."
The agency claims that Lewis convinced more than 20 applicants to lend him money. As part of the agreement, Lewis has agreed to partial restitution, $28,000, by June 20, the statement said. The individuals retain the right to sue Lewis in civil court for the remainder, according to the agreement.
Colonial has been ordered to immediately cease all advertising and is barred from accepting new loan applications, though it will be allowed to complete pending loan commitment transactions. Lewis will be barred from applying to do business as a mortgage lender or broker without first seeking permission from the state's attorney general, the agency said.
According to published reports, Lewis' attorney stated that his client and Colonial were cooperating with authorities. He also added that the lending practices of Colonial were not at issue, only loans Lewis may have obtained.