Half-dozen California lending companies shut down over mortgage scam
Updated: 2008-03-19 08:45
LOS ANGELES - The California state Attorney General's Office shut down a half-dozen lending companies on Tuesday for their alleged involvement in pushing homeowners into "illegal and unconscionable loans."
In a lawsuit filed under seal in Los Angeles Superior Court, the California Attorney General's Office alleged that used "bait-and-switch" tactics to victimize thousands of consumers and cause many to lose their homes.
These companies include Lifetime Financial, Nations Mortgage, Greenleaf Lending, Virtual Escrow, Olympic Escrow and Direct Credit Solutions
"As the mortgage crisis worsens, a growing number of fly-by- night companies are employing utterly brazen tactics to push homeowners into illegal and unconscionable loans," Attorney General Jerry Brown said.
"The illegal sales practices of these companies ... included psychological pressure, forgery and outright lies," he noted.
At Brown's request, the companies' real estate and bank accounts were frozen and they were enjoined from engaging in illegal practices.
The freeze order also includes expensive cars and millions of dollars in private real estate.
Brown also was asking for 20 million dollars in penalties and restitution.
The attorney general said in the near future, he expects to bring civil and criminal action against other lenders and foreclosure consultants who are also allegedly violating the law.
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