The Statement of Charges is actually in the article above. So I’m not seeing where you believe I am providing inaccurate information.

Beyond whether or not DFI gave written permission to air the ads, DFI’s findings were salient:

“Department of Financial Institutions discovered that Linden promised consumers residential mortgage loans at “1% interest, with no points and no fees,” yet no one ever received those loan terms in 2006. DFI reviewed 91 files that were originated during the time the ads aired. Only 10 of these borrowers received a 1% mortgage and those who did, paid $10,000 in fees.”

Intent v. effect.

Even if the intention was not to deceive, the effects of Linden’s actions were found to have merit according to our state regulator.

I wish you well at your new employer, wherever that may be. Thank you for stopping by.

First, Linden was in violation of the federal law regarding the legal way to advertise consumer credit. Read it, and you will see.

http://www.ftc.gov/bcp/conline/pubs/buspubs/creditad.shtm

That they were not the only one violating the law does not absolve them of the responsibility to obey the law

Second, if your allegation that DFI gave them written approval is true, and it is a matter of public record, then can you provide the link to that record?

The SOC mentions nothing about DFI giving them prior written approval to advertise illegally and deceptively.

To state something as fact and part of the public record would imply that you have documentable sources.

If it helps any, I agree that DFI was FAR too lax in preventing illegal advertising in the past. They seem to be much more diligent these days.

You are correct. Along with that, some CLAs allow their branch offices to advertise.

The branches are suppose to run all advertising through their manager. Sometimes that happens, sometimes it doesn’t.

Depends.

Not all CLA lenders or mortgage brokers advertise. Many are set up as net branch models, and do not advertise to public, only to attract LO’s, who may, or may not, advertise the services of the net branch.

Regardless, LO’s should do their due diligence when selecting who to affiliate with!

Good luck Susan!

Yes. My point was that if they’re using “mortgage bank” to recruit, chances are astronomically high that they’re doing the same with consumers.

LOs would be wise to probe into this.

Do you think DFI would make a distinction as to whom the firm advertises to?

Susan seems to indicate they are advertising to LO’s that they are a mortgage bank, with it’s attendant benefits, whereas Paramount’s deception was to advertise to the consumer that they were a mortgage bank.

One would think the standard would be higher, advertising to the less informed public, rather than to to the supposedly better informed LO, and that the use of the term in this case was intended to be an “insider” term for their business model.

Consumer loan companies are not banks.

Advertising themselves as “mortgage bankers” is extremely risky as this is one of the violations cited by DFI in their statement of charges against Paramount Equity.

If I were an LO today and was being recruited by such a company, I would ask them if they were familiar with the recent Paramount Equity DFI investigation.

If the company is not familiar with that case, or, even worse, if the company IS familiar with the case and is still making a decision to advertise to YOU that they are a “mortgage bank” I would not consider that company as a potential employer.

Imagine having to explain to your clients why your company’s name is in the media and on DFI’s naughty list?

The CLA loophole is only around for another year. All LOs will become licensed by July of 2009.

Realize that by going with a CLA that doesn’t have to disclose YSP, that provision is only in place when the loan is funded through the consumer lender’s correspondent line of credit.

When a CLA company BROKERS a loan, YSP MUST BE DISCLOSED.

Maybe you could ask the recruiter about this and see what he/she says.

Then ask what percentage of loans are brokered v. closed on the CLA’s credit line.

CLA’s don’t want to have to tell the world that they’re consumer loan companies.

Saying “mortgage bank”
sounds like a bank
does not sound like a broker
does not sound like a consumer loan lender.

But it’s deceptive.