A Centennial mortgage broker and his companies must pay $1 million in civil penalties, consumer restitution and disgorgement for engaging in deceptive advertising and fraudulent loan-origination practices.
Leo Shifrin was ordered to pay the settlement in Denver district court after Attorney General John Suthers took them to court over the alleged issues. The company is also barred from engaging in loan origination in Colorado, and must pay attorneys fees and costs related to prosecuting the case.
Suthers reached an agreement with another individual involved in the business, Jerry Johnson, before trial, which also provides for a $1 million judgment.
The companies involved were Mortgage Planning & Lending Specialists, Jupiter Lending, Shifrin Inc, CBA Inc and Wholesale Mortgage Lending. All operated out of offices in Centennial.
“This ruling is a victory for Colorado consumers who had relied on these mortgage brokers to put them in loans with low interest rates.” Suthers said. “In most cases, the low teaser rates these and other companies used to draw people in lasted a month and not years. 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.”
According to the complaint, defendants defrauded consumers between 2004 and 2007 through the use of deceptive advertisements and the failure to disclose important details during the loan-origination process. As a result, Colorado consumers ended up with “option ARM” loans, which are riskier than the traditional adjustable rate mortgages. Option ARM loans have only a fixed introductory rate for one to three months before assuming an adjustable interest rate.