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 Finance Protection Bureau, the watchdog organization set up by the White House, busted Amerisave, its affiliate Noro Appraisal Management Company, and the owner, Patrick Markert.
* $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.