Industry News

Mortgage brokers charged in refi scam

Consumers allegedly got stuck with high-interest-rate loans

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The Federal Trade Commission has charged a group of Colorado-based mortgage brokers with violating federal laws by deceptively claiming they will refinance consumers' mortgages at the lowest rates available at no cost to the consumer. The FTC alleges that instead of receiving a low-rate mortgage, many consumers have been stuck with high-interest-rate loans, had liens placed on their property, incurred damage to their credit ratings and in some cases faced the beginning of foreclosure proceedings. At the FTC's request, a U.S. district court judge has issued a temporary restraining order barring the defendants' alleged illegal business practices and freezing their assets. According to the FTC's complaint, a group of corporate and individual defendants sometimes known as PWR Processing Inc., have run ads in newspapers in several states including California and Colorado, as well as on their Web site, claiming "Free 10, 15, 20, 25, or 30-year fixed" mortgages at "today's rate" with "no ...