Mortgage companies in Georgia, Massachusetts and Michigan were punished for lending violations including deceptive business practices, illegal loan charges and mortgage fraud.
Vertical Lend Inc., which does business as The Mortgage Warehouse, has also been issued a Cease and Desist order from the Massachusetts Commissioner of Banks, preventing the company from making loans until the case is heard by state regulators.
The Massachusetts subprime lender has been tagged with a $100,000 fine for allegedly charging illegal fees, forging signatures, creating phone loan documents and withholding information from lenders.
The problems were discovered during a routine January audit conducted by the Massachusetts Division of Banks.
“Vertical Lend has engaged in unfair and deceptive business practices,” the state alleged in a 10-page order. “Vertical Lend … shall immediately cease engaging in the activities of a mortgage broker.”
The company did not respond to MortgageDaily.com’s request for a comment.
Regulators showed in the order that on at least 11 instances, Vertical allegedly charged fees ranging from $6,445 to $10 that borrowers were unaware of. The state is ordering that the borrowers be reimbursed.
The company is also accused of using unlicensed brokers, failing to provide regulators with loan documents and failing to disclose information to borrowers.
In Michigan regulators have suspended the license of Financial One LLC for allegedly violating the state’s mortgage laws.
“The company is no longer permitted to engage in any activities requiring licensure … (and) to cease and desist from engaging in any activities regulated by” the state, according to a statement from the Michigan Office of Financial and Insurance Services.
Financial One, which is based in Delaware, also could not be reached to comment.
In the Michigan’s statement, Linda Watters, the state’s top financial regulator, said the company violated state laws by taking money for services it didn’t perform; engaging in fraud, deceit and material misrepresentation; equity stripping; forgery in connection with the acquisition of several residential mortgage loans; and unlicensed mortgage activity.
“Investigators have methodically investigated Financial One and have identified numerous violations,” Watters said. “If these activities are allowed to continue, they could result in disastrous financial consequences for borrowers, investors and lenders.”
Georgia has continued its aggressive crackdown on alleged violators of the state’s mortgage laws and practices.
The state’s Department of Banking and Finance has entered into a consent order with Homequest Financial Services of Stone Mountain and its president, Anthony Brewer.
According to a statement, Brewer and the firm are accused of violating Georgia mortgage laws. The state has revoked Homequest’s license and barred Brewer from the mortgage business for three years.
The same punishment was handed down to Worldwide Financial Group of Jonesboro and its owner, Xavier Gray.
The state did not detail the violations in either order.
Georgia regulators also issued cease and desist orders.
According to multiple announcements, brokers Joseph Watkins of Ellenwood and Johnson of Marietta were cited for “misrepresenting material facts likely to induce a mortgagor to take a mortgage loan, misrepresenting or concealing information concerning mortgage transactions and for engaging in a course of business not in good faith.”
And Direct Lending Partners, which operated in Georgia and is based in Clearwater, Fla., was issued an order for brokering loans without a license.
