No Closing Costs

Phoenix, AZ: (Sep-24-07) Attorney General Terry Goddard's office brought charges against Lenox Financial Mortgage, LLC, alleging that the Atlanta-based mortgage broker violated the Arizona Consumer Fraud Act by failing to include disclaimers in its radio advertisements promoting Lenox Financial's no closing costs mortgage loans. The suit claimed that Lenox Financial ran thousands of radio ads in Arizona that promised "no closing costs" mortgage loans to consumers wanting to buy a home or refinance existing mortgage loans. As per court documents, the company's "no closing costs" ads did not contain any disclaimer or other qualifying language stating that the availability of this kind of loan depended on the consumer's credit score, income level, debt load, or other indications of credit-worthiness. Though a majority of Lenox Financial's customers were offered the loans, the complaint alleged that the company did not broker such loans for every consumer who replied to its advertising and was otherwise eligible for a mortgage loan.

In a settlement reached, Lenox Financial Mortgage agreed to pay Attorney General Terry Goddard's office $95,000. Additionally, as part of the settlement, in the form of an Assurance of Discontinuance, Lenox Financial agreed to include a disclaimer or other qualifying information when advertising the availability of "no closing costs" loans unless Lenox Financial makes these loans available to all consumers who are otherwise eligible. [ARIZONA CENTRAL: MORTGAGE FRAUD]

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Published on Sep-25-07