Amerisave Fined $19.3 Million For False Advertising and More

Bait-and-Switch is a serious crime.

Bait-and-Switch is a serious crime.

It was bad enough seeing the impossibly low interest rates posted by Amerisave, but when they showed up on reputable websites like Bankrate and Mortgage Professor, it was downright disturbing. Why would they let a liar post on their websites? Didn’t they value their reputations? I sent an email asking and received a very unsatisfactory reply. It seemed like the god of greed was ruling over decency.

I heard from several good folks who had read Mortgage Rip-Offs and Money Savers that they were promised a low interest rate and then locked in at a higher rate. And the fees! The huge, ridiculous fees! It was like old fashioned highway robbery.

But justice finally caught up with the scheme that took advantage of borrowers in all 50 states. The Consumer amerisave logoFinance Protection Bureau, the watchdog organization set up by the White House, busted Amerisave, its affiliate Noro Appraisal Management Company, and the owner, Patrick Markert.

The Result:

* $14.8 million must be paid back to consumers who were sucked in and taken advantage of.

* $6 million in fines and penalties for the companies and Mr. Markert.

* An order to stop advertising rates that are not actually available.

* An order to follow the disclosure law by revealing the relationship between the lender and the appraisal company.

* An order to stop collecting money from borrowers before providing a Good Faith Estimate (which is illegal).

The Lesson for Everyone

Listen to your gut instinct and common sense. When someone claims to have an interest rate that is so much lower than every other lender in America, you know something is amiss. Choose the honest, ethical loan officer over the smooth-talker who refuses to answer your questions directly. Never give your credit card to pay for a lender fee or appraisal before you have received a Good Faith Estimate.

To read more about this news story, see the CFPB post here.

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One response

  1. Ramakrishna Potluri | Reply

    Hi,

    I am one of the sufferers with the Amerisave not sanctioning the loan (in the month of 2012 April) as I locked my interest rate low (2.625% for 15 years fixed). Me and My wife have excellent credit and we have permanent jobs. The company asked for so many documents and finally refused my loan on the basis of “Temporary employment”, though we have permanent jobs. Then to meet the house closing date with the builder, I could get my loan sanctioned by Well Fargo Bank with a (3.125% interest rate fixed for 15 year) in less than two weeks.

    We suffer because some of these companies just cheat.

    thanks for not letting them getaway.

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