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Reverse Mortgage Blues

New York, NY: (Apr-24-08) Attorney General Andrew M. Cuomo's office brought charges against Upstate Capital, Inc. of Basile Rowe in East Syracuse, a reverse mortgage lender, alleging that it preyed on seniors statewide through false advertising and portraying itself to be a local non-profit organization. The suit claimed that in an attempt to solicit business from senior homeowners across the state, Upstate Capital presented itself in promotional materials and flyers as the Association for Better Living (ABL), Inc., a non-profit organization. Before shutting shop in 2002, ABL specialized in upgrading housing conditions in Central New York. Records show that Michael Gilman of Dewitt happens to be Director of Operations for Upstate Capital as well as President of ABL.

The suit stated that from July of 2007, Upstate Capital sent flyers portraying itself as ABL to seniors statewide promoting a new government program that aimed to protect seniors by providing a monthly, tax-free income with no income or credit qualifications. The company also claimed that the lifetime program required no repayments. Those responding were directed to call the company to obtain a free packet of information on the program. They would then be contacted by an Upstate Capital representative on behalf of ABL. The advertising campaign neglected to say that the source of the money was actually a loan, and that the product the company is peddling was actually a reverse mortgage.

As part of a settlement reached in the case, the AG's office announced that it has stopped Upstate from preying on seniors statewide, as well as ordered the company to reform its marketing practices and indicate that it is a registered mortgage/reverse mortgage broker. Additionally, the company must also pay $20,000 in costs and penalties to the state. [WBNG NEWS: ATTORNEY GENERAL CUOMO URGES HOMEOWNERS TO BE INFORMED WHEN EXPLORING REFINANCING OPTIONS]

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Published on Apr-27-08


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