REGULATORS SEEK REVOCATION OF SOUTH
FLORIDA MORTGAGE LENDER’S LICENSE
announced today that they are seeking revocation of a South Florida mortgage
lender’s license for predatory lending practices, including misrepresenting loan
terms and fees. The lender, First Mortgage America, Inc., provided loans to
consumers through several of its branch offices, including Miami, Dania, West
Palm Beach, Sarasota and Tampa.
The Office of Financial Regulation (OFR) filed an Administrative Complaint
against First Mortgage America, Inc., d/b/a The Financial Group, Inc., on April
16, 2004. The Complaint seeks revocation of the firm’s mortgage lender’s
license and other penalties. The Financial Group, Inc., is headquartered in Ft.
State regulators initiated a statewide examination into the lender’s activities
and its owner, Blair Wright, after receiving more than fifty consumer complaints
alleging, in part, “ misleading advertisements, misrepresentation of loan terms
and conditions and misrepresentation of fees.”
According to examiners, The Financial Group, Inc., engaged in frequent radio
advertising of very low interest rates. Potential borrowers were led to believe
that the low rates advertised on the radio were fixed rate mortgages, when in
fact they were adjustable rate mortgages. The loans were structured such that
the monthly payment may not be sufficient to cover the monthly principal and
interest payment resulting in an increase rather than a decrease to their
mortgage loan balance.
Examiners also determined that The Financial Group, Inc., failed to disclose or
underestimated to potential borrowers the total costs to be incurred in
obtaining their mortgage loan.
“It is essential that mortgage companies reasonably disclose the cost of
obtaining a mortgage loan to consumers so they have the ability to make informed
decisions on one of the most important purchases they will make,” said Don
Saxon, Director of the Office of Financial Regulation. Mortgage companies that
fail to comply with Florida law will be investigated and appropriate action will
be taken to protect consumers.
Regulators should be commended for taking swift and severe action against a
company that has been preying on Florida consumers," said Florida's Chief
Financial Officer Tom Gallagher, who oversees the Department of Financial
Services and launched a public education campaign last year to warn the public
against predatory lending practices. "Whether you're purchasing your first
home, refinancing or need a home equity loan, watch out for excessively high
interest rates and hidden fees, bait-and-switch tactics, and unnecessary
Consumers seeking mortgage loans are encouraged to verify that they are dealing
with a licensed mortgage broker or lender. The Department of Financial
Services' toll free consumer help line is available at 1-800-342-2762 from 8:00
a.m. to 7:00 p.m. E.S.T., Monday-Friday.