FOR IMMEDIATE RELEASE FROM
THE WASHINGTON DEPARTMENT OF FINANCIAL INSTITUTIONS

Contact
Lyn Peters, Director of Communications
PH (360) 349-8501 or CommunicationDir@dfi.wa.gov

03/23/2000

A California-based mortgage company doing business in Washington since 1994 is no longer authorized to make mortgage loans in Washington, according to the Department of Financial Institutions (DFI). First Alliance Mortgage Company, which has written hundreds of mortgages for Washington residents, has surrendered its consumer loan license.

The action was the latest move in an ongoing dispute between the company and the DFI, in which the state sought to have the company's license revoked. The company surrendered its license Monday, March 20, on the eve of an administrative hearing that was to be held on charges made by the state agency against it. Consumers who feel they may have problems with loans made by the company are now being urged to get in touch with state regulators.

According to Mark Thomson, director of DFI's Consumer Services Division, charges were filed against First Alliance last April after a routine examination of the company. In its charges, the department alleged that First Alliance failed to comply with it’s request for records, had operated from unlicensed locations, and failed to make reports required under the federal Home Mortgage Disclosure Act.

"Under the Consumer Loan Act," says Thomson, "we go in about every two years and do an examination to determine whether the licensee is doing business in compliance with our statutes. We requested a group of loan files and they gave us some, but not all of them. They also failed to give us other information we asked for," he added.

"We believe that, despite the license surrender, the company has continuing obligations under the law to provide us with access to books and records to investigate complaints about loans that were made when they had a license," said Thomson.

Thomson adds that the department is now trying to determine what its next step should be to best protect Washington consumers. "In our view, this matter is not resolved. Any consumer with concerns about their loan should contact us by calling 1-877-RING DFI (1-877-746-4334)."

First Alliance is also under investigation by the U.S. Department of Justice, and is currently being sued by the AARP, as well as regulators in four other states. In Washington state, nearly 50 complaints have been filed against the company since October 1995.

Thomson said that consumers had complained about the First Alliance's marketing and sales practices, that the company had charged excessive fees, and that the buyers did not fully understand the fees they were being charged.

Although First Alliance Mortgage Company is headquartered in Irvine, California, it operates nationwide and operated in this state out of a single licensed location in Bellevue. According to Department of Financial Institutions' records , the company wrote in excess of 600 mortgage loans in Washington between early 1995 and December 1998.