Internet Lender Hit with $20 Million Plus in Penalties

An Atlanta-based Internet mortgagerncompany, its owner and an affiliate have been hit with a $19.3 million penalty</bfor what the Consumer Financial Protection Bureau (CFPB) said was a bait andrnswitch mortgage scheme.  AmerisavernMortgage Corporation, its affiliate Novo Appraisal Management Company, andrnPatrick Markert the owner of both companies were found by the Bureau to havernlured customers by advertising misleading interest rates and then locked themrnin with costly up-front fees, failed to honor the advertised rates, andrnillegally overcharged them for third-party services without disclosing thernaffiliated relationship.</p

Amerisave advertises and lendsrnnationwide.  CFPB contends that between<bmid-2011 and 2014 the company used online banner ads and searchable rate tablesrnon third-party websites, posted inaccurate rates on these ads, and whenrnconsumers followed the ads to the Amerisave website were given rate quotesrnbased on a FICO score of 800 regardless of the score the consumer provided in arnquestionnaire.   Consumers were requiredrnto order and authorize payment for an appraisal before Amerisave would providerna Good Faith Estimate and the company did not tell consumers until later thatrnappraisal orders were being referred to Novo, its affiliated company.  </p

At closing customers were charged for “appraisalrnvalidation” reports also provided (and undisclosed to the consumer) by Novornwhich marked up the cost of the reports by as much as 900 percent afterrnAmerisave had informed customers they had arranged for a “special deal” for thernreports.    </p

In addition to the financial penaltiesrnthe consent agreement requires that Amerisave stop advertising the unavailablernmortgages rates, no longer charge illegal fees or make referral to its affiliatesrnwithout proper disclosures, implement a quality control program, and retain anrnindependent consultant to review its advertising practices.   </p

“Amerisave lured consumers in withrndeceptive advertising, trapped them with costly upfront fees, and thenrnillegally overcharged them for services from an undisclosed affiliate,” saidrnCFPB Director Richard Cordray. “By the time consumers could have discovered thernadvertised low rates were too good to be true, they had already committed tornpay hundreds of dollars to Amerisave. Today’s action puts an end to Amerisave’srnunacceptable bait-and-switch scheme and holds Patrick Markert personallyrnresponsible for his illegal actions.”

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