7 mortgage brokers shut down by state (Massachusetts) [View All]

[deadparrot]

The state yesterday shut down seven mortgage brokers in Massachusetts and banned a variety of deceptive lending practices in what regulators called a sweeping crackdown on rogue brokers who steer customers in poor urban neighborhoods to loans they cannot afford.

Acting two weeks after the Globe reported a range of abuses by several mortgage brokers in Lawrence, the Division of Banks announced that 50 examiners had since made surprise inspections of 90 brokerage firms in central and eastern Massachusetts.

After finishing about a third of the examinations, regulators closed four licensed brokers and three unlicensed shops. The licensed brokers had inflated assets of borrowers so they could qualify for loans, said Commissioner of Banks Steven L. Antonakes . The brokers must win appeals to stay in business. The other operations were shut down because they did not have state licenses; they would have to obtain licenses to operate.

Regulators have also gathered evidence of other abuses in the industry, including brokers discouraging homebuyers from hiring lawyers to scrutinize mortgage documents and persuading borrowers to sign blank loan applications. As a result, the division has adopted emergency, and permanent, regulations banning fraudulent practices, particularly scams that target poor consumers with limited English skills.

http://www.boston.com/news/local/massachusetts/articles/2006/09/09/7_mortgage_brokers_shut_down_by_state/