Colorado AG fines two brokers nearly $1 million each for deceptive lending
A Denver District Court ordered two Colorado mortgage brokers to pay civil penalties of nearly $1 million each for deceptive advertising and fraudulent loan origination practices. The court found Leo Shifrin conducted unlawful and misleading business practices between January 2004 and June 2007, rolling potential homeowners into option adjustable-rate mortgages. "Through the advertisements used to solicit customers and the dealings they had with consumers, the defendants failed to make required disclosures about loan terms and failed to clearly describe the loan program consumers were enrolling in," according to the Colorado attorney general. "The court found that defendants lured borrowers into their offices with hundreds of advertisements printed in The Denver Post and The Rocky Mountain News that featured low teaser rates." Shifrin held many positions at several mortgage brokerages, including Mortgage Planning and Lending Specialist, Wholesale Mortgage Lending and Shifrin, Inc., according to the official complaint. All the companies are listed as defendants in the case. Before this trial, the attorney general reached a consent agreement with another defendant, Jerry Johnson, who is a loan officer and worked with Shifrin. Both Shifrin and Johnson had personal knowledge of ongoing deceptive practices, the complaint said. Colorado Attorney General John Suthers said the ruling is a victory for Colorado consumers. "In most cases, the low teaser rates these and other companies used to draw people in lasted a month and not years," Suthers said. "This verdict is as much a victory for affected consumers as it is a statement that my office has and will continue to aggressively prosecute individuals and companies engaged in mortgage fraud." Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.