The Consumer Financial Protection Bureau (CFPB) has penalized online lender Amerisave Mortgage Corp. for promoting inaccurate interest rates and loan terms between mid-2011 and 2014. The company must pay $14.8 million in refunds to homeowners plus a $4.5 million fine for misleading borrowers; while its owner, Patrick Markert, is on the hook for another $1.5 million.
Tens of thousands of borrowers were persuaded to take out loans based on the deceptive terms, according to the CFPB. “Amerisave lured consumers in with deceptive advertising, trapped them with costly upfront fees, and then illegally overcharged them for services form an undisclosed affiliate,” said the agency's director, Richard Cordray. “By the time consumers could have discovered the advertised low rates were too good to be true, they had already committed to pay hundreds of dollars to Amerisave.”
Amerisave gave consumers quotes based on a FICO score of 800, even if a lower score was entered. It also required consumers to order and give payment authorization for an appraisal before it would provide a Good Faith Estimate for the mortgage and did not tell consumers until later that the appraisal orders were being referred to an affiliated company.