Washington State Department of Financial Institutions

News Release

Thursday, August 07, 2008

Contact Deb Bortner, Director of Consumer Services
PH (360) 902-0511 dbortner@dfi.wa.gov

Lyn Peters, Director of Communications
PH (360) 902-8731 lpeters@dfi.wa.gov

FOR IMMEDIATE RELEASE:


State Settles Two False Advertising Cases - Mortgage Firms Pay More Than $200,000 In Fines And Costs

DFI alleged firms engaged in deceptive radio and direct mail advertising campaigns

OLYMPIA – The Department of Financial Institutions (DFI) entered into Consent Orders today with two firms previously charged with false advertising.

In a Statement of Charges issued Dec. 14, 2007, Linden Home Loans of Kirkland, Wash., a licensed mortgage broker, and its two owners — Christopher Opdyke and Mark Sullivan — were accused of bait and switch advertising. Rather than contest the charges, the Respondents agreed in a Consent Order to pay a $75,000 fine and $4,000 in costs. The Respondents, who did not admit to any wrongdoing, further agreed their licenses to conduct business in Washington would be suspended for 30 days. Linden Home Loans voluntarily surrendered its mortgage broker license on July 7, 2008.

In a Statement of Charges issued March 5, 2008, Assurity Financial Services of Englewood, Colo., a licensed consumer loan company, and its two owners — Calvin and Troy Hamler — were accused of engaging in a deceptive direct mail solicitation campaign. In this case, rather than contest the charges, the Respondents agreed in a Consent Order to pay a $250,000 fine, with $125,000 paid and $125,000 suspended, plus $5,000 in costs. The Respondents, who did not admit to any wrongdoing, further agreed that if they fail to comply with the injunctive provisions of the Consent Order, the balance of the fine would be imposed and Respondents Calvin and Troy Hamler would be prohibited from the consumer loan industry for five years.

Deb Bortner, Director of DFI’s Division of Consumer Services, noted that both firms immediately suspended their advertising campaigns when the charges were filed.

“Stopping false mortgage advertising in Washington is a high priority for the Division,” Bortner said. “Our settlement with Assurity Financial will ensure that future advertising by the firm will comply with both the letter and the spirit of Washington law.”

Scott Jarvis, Director of DFI, notes that the Division is focused on systematically eliminating false advertising.

“These cases resulted from regular, on-going reviews of mortgage advertising,” Jarvis said. “We are committed to protecting Washington consumers from deceptive lending practices, which often begin with or include false advertising. The penalties imposed in these cases demonstrate that we are serious about assuring truth in advertising, and that businesses offering mortgage loans to Washington consumers will pay the price for false and deceptive advertising.”

In the Department’s third case related to truth in advertising, DFI filed charges July 22, 2008 against Paramount Equity Mortgage, Inc., of Roseville, Calif. The firm is accused of engaging in a number of deceptive lending practices, including false advertising. The investigation is ongoing.


Linden Loans, LLC:
Consent Order; Statement of Charges; Prior Press Release

Assurity Financial Services, LLC:
Consent Order; Statement of Charges; Prior Press Release

About DFI
www.dfi.wa.gov ▪ 360.902.8700 ▪ 877.746.4334 ▪ En Espaņol 877.976.4422
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders, and securities brokers and dealers. The department has won numerous awards for its financial literacy and outreach programs developed to protect consumers from financial fraud. In addition to posting information about licensees and administrative actions, the DFI’s Web site features consumer tips on a variety of financial fraud-related topics.

About the Division of Consumer Services
www.dfi.wa.gov/cs ▪ 360.902.8703
The mission of the Division of Consumer Services is to protect consumers from illegal and fraudulent lending practices. The division accomplishes its mission through licensing, licensee examinations, investigations, and enforcing selected state and federal statutes and rules. Consumer Services regulates the business activities of consumer loan companies, mortgage brokers, money transmitters and currency exchangers, as well as check cashers and sellers, also known as "payday lenders." The Division is entirely self-supporting, with funding provided by licensing, auditing, and policing of regulated businesses and individuals. No money is received from the state General Fund or other public revenue source.

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