We have not one, but TWO ugly loans which are breaking us from good ol’ Paramount Equity Mortgage. JUST YESTERDAY I filed a formal complaint with the State of Washington and intend to follow it with a formal lawsuit. I spent a lot of time on the phone with Matt Dawson a few months ago after reaching out to him for help, and listened to him tell me that “He has never been sued for a mortgage in his life.” I am going to assume that is because he takes care of disgruntled borrowers before they make it to court-as he has done in Washington State this past May.

Washington is acting like a cheap call girl, I must say. They want that money, so they let them continue business, that is my opinion. They got a slap on the wrist. The citizens who signed these toxic documents are suffering EVERY DAY and losing their homes because Matt and Hayes need to make their yacht payment. Our financial lives, that took 30 years to build, have been crushed because of the decpeption that occurred in their office (where no employee appeared to be over 40 years of age) I remember asking at the closing table, “Does anyone have gray hair in this building??!!” It was unnerving. The parking lot looked like a BMW Sales Lot.

I have been strongly encouraged to pursue my case by a VERY knowledgeable attorney (it’s unbelievable what they did with our loans, and unfortunately for them, my attorney delighted in the POSTMARKED envelopes I still have in my possession packed full of documents with evidence of their deception in my counsels capable hands).

Soon, I intend to stop crying about our mortgages, as I have been doing over the last THREE YEARS… Cheers to you Jillayne for hanging with this. They are slimy snakes who prey on every person who closes a loan with them without the benefit of legal counsel at their side to cry foul.

And Washington State Department of Financial Institutions: SHAME ON YOU. Shame on you.

I hope you hear more.

1. Hold the media accountable for deceptive advertising, and fine them in proportion to their revenues derived from the deceptive advertising (include the Post Office and internet in this, since they are media carriers for profit).

2. Make the fines/costs to the lenders large enough to wipe out the profitability of illegal advertising.

3. Make it socially unacceptable among your peer group. Increase professionalism in the industry.

4. Have lenders police other lenders, with the assistance of regulator’s stringent enforcements.

Frankly, I have found only little interest and effort among lenders (and others) to do anything about deceptive advertising. There are notable exceptions that I could name, but I do not know that they would wish to be “outed”.

Certainly, it has not benefitted me in any way financially to crusade against this, so others in the industry have probably concluded it is not in their best interest to devote time and energy to the cause.

Whether for good or bad, it seems I have a strong Quixote-complex that compels me to battle windmills. That kind of idealism is not encouraged in this industry; pragmatism rules the day.

It is from these observations that I conclude that options 1 and 2 are more likely to produce short term results, while options 3 and 4 are more like glacial movements. I predict it will happen, and is worthy of encouragement, but it will be a slow change in societal norms that will hopefully prevail.

The pragmatist always bets on the basest of human natures (greed, lust, envy), while the idealist bets on the best of human natures.

The pragmatist ends up with most of the money, and probably more friends. The idealist, if lucky, gets a song.

Sigh…..

Here is another slimy CA lender (Win Financial) that got caught by DFI for deceptive ads.

http://www.dfi.wa.gov/CS%20Orders/C-08-114-08-SC01.pdf

This time, it was those predatory mailings that are made to look like they are from your own mortgage servicer, warning of a pending adjustable rate increase.

The original fine was $500,000 and revocation of license, but in the consent order it was bargained down to probationary suspension of license and a $10,000 fine.

I should know a lawyer so good!

In the statement of charges, you will see that they mailed 14,500 solicitations, received 390 calls, and took 95 applications.

So, let’s see if crime really does pay, even if you are caught red-handed. I’ll have to make a few admittedly speculative assumptions.

14,500 mailings, cost of $1 ea= $14,500

Generates 390 calls (2.69%, unusually high for direct mail, but then, if you are allowed to cheat and lie, maybe not much),

Leading to 95 applications, with a fallout of 50% (?), results in 47 loans. Each loan should have generated conservatively $3,000 gross revenue, for a total revenue of $141,000.

For a cost of only $14,500, plus the $10,000 fine, net profit (before any additional expenses… office rent, phone, etc.)

=$116,500

Yup, any reasonable businessman (lacking any moral compass) would conclude that crime does pay in WA state, and pays handsomely.

Of course, I wan’t there in the hearing, maybe WIN had a sick mom to support or something to make his crimes appear to be excusable.

Or, maybe, Win Mortgage was able to successfully plead “Everyone Does It!”

I know I have received at least two mailed solicitations in the past 3 months that were similar to the ones sent by Win, so that MAY be a reasonable excuse.

But, until we start to reject the excuse that “Everyone Does It”, these crimes will continue, as it appears to be entirely rational to commit the crime, for profit, despite the risks.

I’d complain more often, if I had nothing else to do in life. As it is, I complain enough.

Maybe if more people complained, AND sent these deceptive ads to DFI, this abuse would end.

Here’s where you can start.

http://www.dfi.wa.gov/cs/complaint.htm

C’mon folks, it’s a little bit like picking up litter in your neighborhood. If we all do a little, the results will be spectacular. If we all walk past it, the neighborhood will soon be a dump, and the task of cleaning it will be daunting.

Thanks so much for your in-depth analysis of this slimy operator whose flat-out lying in their advertisements has left me steaming as I am driving to or from work. I’m just disappointed that we live in such a permissive society that they are still allowed to do business in our state. I’m pretty sure that if they had run these same ads 15-20 years ago, the outcome would have been significantly different.

I appreciate your restrained and factual reporting on this issue. I couldn’t do it myself as I am just too darn mad at them!

“Respondent Paramount admits that during the relevant time period, Paramount did not maintain books and records…processed 56 loans originated by unlicensed loan originator…and, in some aspects of its advertising, were in violation of RCW 19.146.0201(2), (7), (10), and (11). With these exceptions, Respondents neither admit nor deny the Factual Allegations of the Statement of Charges.”

Thank you Roger and Anon!

After reading the SOC and Final Consent one more time (I know, get a life!), actually Paramount DOES admit wrongdoing.

From page 2, E. Admissions

Respondent Paramount ADMITS that during the relevant time period, Paramount did not maintain books and records, processed 56 loans originated by unlicensed originators, and were in violation in some aspects of its advertising.

Evidently, they did not all agree that ALL of the charges were valid. I was kind of hoping they would have charged Hayes with excessive use of hyped-adjectives, and improper use of oily vocal tones. Those would have stuck.

Makes one kind of wonder what is happening with Countrywide’s case, which makes Paramount’s seem like small potatoes…,

http://www.dfi.wa.gov/CS%20Orders/C-08-030-08-SC01.pdf

The state budget is shy a few billion…the $6-7M in proposed charges could restore a few teachers’ positions, or pay for some poor kids health care… , and it would barely create a blip in Mozillo (or Lewis’) retirement portfolio…

I have played Poker for 24 years before it became popular. On a table there tends to be a “cop” that keeps everyone honest and calls people on their bets/bluffs when someone is getting out of line and raking in too many pots. Eventually they get exposed.

Jillayne are you becoming the table cop? It appears so.

With the jingle and your article I now am suspect of Paramount Equity. Will they go the way of the Shane Company with an even worse jingle? We shall see….

Great reporting though.