August 24, 2014

Amerisave to pay $19.3M over mortgage scheme

Aug. 13, 2014 – CFPB took action against Amerisave Mortgage Corporation, its affiliate and the owner of both companies for engaging in a "bait-and-switch" mortgage lending scheme that affected tens of thousands of consumers, the bureau announced Tuesday.

CFPB has ordered the companies to pay $14.8 million in refunds to its consumers, stop advertising unavailable mortgage rates, no longer charge illegal fees and pay a $4.5 million penalty payment. The owner of the companies Patrick Markert was also ordered to pay an additional $1.5 million fine.

Amerisave, its affiliate, Novo Appraisal Management Company, and Markert are accused of advertising interest rates and terms on online banners and in searchable rate tables on third-party website that were inaccurate. CFPB noted that when consumers were directed to Amerisave's website, the quotes they were given were based on FICO scores of 800, even if consumers entered a lower score. The company also required consumers to order and give payment authorization for an appraisal before receiving a Good Faith Estimate for a mortgage.

Furthermore, Amerisave also charged consumers for "appraisal validation" reports without the consumers' knowledge that the reports were being referred to Novo, its own affiliate, and marked up by as much as 900 percent.