Deceptive Mortgage Ads Eliminated

Mortgage advertisements are to attract property buyers. But what most of the consumers do not know is that there are hidden risks in getting carried away by those ads.

Attorney General John Suthers moves to put an end to the deceptive mortgage ads by foreclosure rescue firms and mortgage brokers to save Colorado homeowners. His specific targets are those who offer adjustable rate mortgage loans or ARMs, without informing the people of the risks attached to such an option.

Three brokers practicing deceptive-advertising have been named by Suthers: 5280 Financial Group, Arbor-Financial Inc., and Mortgage Toolbox. But after some agreements have been signed, these brokers have agreed to disclose real loan terms and only fixed rate or traditional loans, and not the ARM option in their advertisements.

Other actions have been made by Suthers. He has filed civil-consumer protection claims against Home Mortgage Solutions Inc. for its direct mail regarding ARM without including the associated risks. He has settled with Encore Lending LLC, which inflates incomes of borrowers to qualify them for better loans. Another settlement has been agreed with Tri-Point Realty, which sends false letters to Colorado homeowners requesting them to refinance.

Lastly, Suther's office has entered into an agreement this year with seven companies to protect distressed homeowners facing foreclosure from rescue firms who do not follow the Colorado's Foreclosure Protection Act.

All the companies Suther have named have agreed to cease operations until they are able to comply with the Foreclosure Protection Act. He has also noted that the Colorado Housing and Finance Authority offers free or low-cost programs regarding mortgage application.

It is good to know that there is an effort like this from a state's Attorney General. This is very advantageous for Colorado homeowners because this enables them to be more careful in dealing with mortgage brokers and rescue firms.

The revelations of the deceptive-advertising practices have stopped such practice, and have advocated the protection of the borrowers facing foreclosure.