First Mortgage America accused of predatory lending
By COCO SALAZAR
8/23/2005

A Florida mortgage company has agreed with state regulators to pay $150,000 to settle charges of predatory lending practices and misleading marketing tactics.

Under terms of a stipulated order and consent agreement, First Mortgage America has agreed to modify all current and future advertisements, including those for radio, TV and the Internet.

The recent agreement comes more than a year after the Florida Office of Financial Regulation filed a complaint seeking revocation of the Fort Lauderdale-based lender's license, accusing it of misleading advertisements, misrepresentation of loan terms and conditions, and fees.

The office accused First Mortgage of underestimating closing costs, receiving mortgage brokerage fees over the amount agreed in writing with the borrower and failing to provide required written disclosures to borrowers, among other things, according to the settlement.

While First Mortgage did not admit liability, it agreed that over the next six months it will have ads reviewed by the state regulator prior to using them.

Company president Blair Wright submitted a quarterly report to the state listing procedures First Mortgage had complied with such as clearly disclosing to borrowers the total amount of broker fees it receives, maintaining copies of closing statements or documentation of canceled or denied applications, and keeping its mortgage brokerage and lending transaction journal current.

The lender has agreed to pay an administrative fine of $50,000 and $100,000 to reimburse the office's examination and investigative expenses. Other agreements by First Mortgage include ensuring that its employees are fully trained, changing the focus of its Web site advertising of adjustable-rate products as having the "security of stable rates" to the stability of payments due under the program, and modifying a current ad airing on TV within 90 days of resolving a dispute with an advertising agency, the settlement document said.

Wright's history with state regulators dates back as far as 1991. Companies he has led since then have been accused of advertising fixed-rate loans with "no points" although these were being charged in the form of a five-year-term second loan, and advertising participation in a hurricane relief bond program of low-cost loans, despite not being an approved lender of the state-run program.

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