California Loan Mod Company Sued in Minnesota

Allison Tussey —  March 17, 2011 — 4 Comments

Meredian Financial Corporation, a California-based mortgage lender and broker, is the subject of a lawsuit filed in Minnesota, which alleges that the company charged Minnesota homeowners thousands of dollars to refinance their mortgages, but failed to deliver the promised services. Meredian contacted Minnesota homeowners and pretended to be their current mortgage company in order to gain their trust, then extracted thousands of dollars in fees for refinancing services that it did not deliver.

The lawsuit alleges that Meredian first baited homeowners by passing itself off as their current mortgage lender, then made numerous false representations including low fixed rates, no out-of-pocket expenses, no appraisal requirement, and that the refinance had already been approved by an underwriter, in order to get them to pay up-front “rate-lock” fees. Meredian falsely represented that these fees–typically between $1,000 and $4,000–would be refunded at the closing, which it claimed would occur within 30-45 days. Once Meredian obtained the up-front fees from a given homeowner, it would cease work on the loan file, creating excuses such as asking for documents the homeowner had already provided or that were irrelevant to the refinance, or changing the terms of the refinance with higher rates and fees. Homeowners who attempted to cancel and requested that Meredian return their up-front fees were denied refunds.

The lawsuit was filed by the Minnesota Attorney General Lori Swanson. 

AG Swanson Warns Homeowners to Beware of Refinancing Scams. Attorney General Swanson also issued an alert entitled Beware of Refinancing Scams, warning homeowners about predatory mortgage refinancing. The Alert provides tips such as:

-Research the company. Don’t believe telemarketer claims about the legitimacy of a given company. Research the company on your own. If a caller claims to be associated with your current lender or claims to have personal credit information that only your bank would have, call your lender at the phone number on your monthly bill to verify it.

-Get it in writing. Don’t believe verbal representations about low rates or favorable terms. Get everything in writing before you agree to refinance, including a good faith estimate, which outlines the fees associated with the refinance, and truth-in-lending statement, which spells out the APR (annual percentage rate). Don’t agree to sign anything contrary to what you were promised.

-Shop around for the best loan. Contact multiple lenders to compare rates and terms. Review offers closely, and watch for excessive fees. Since refinancing fees can be rolled into a loan, they are easy to disguise, and unscrupulous lenders may try to represent a certain rate or no “out-of-pocket” expenses, while charging excessive fees financed through the loan.

-Don’t be pressured into acting quickly. Don’t feel pressured into locking in right away, especially if you are unfamiliar with the company. It is tempting to lock in immediately when offered certain rates or terms, but be wary of any entity that pressures you into acting too quickly. Slow down, getting everything in writing, and compare terms and rates.

Homeowners may file a complaint by contacting the Minnesota Attorney General’s Office at 1-800-657-3787 or 651-296-3353. Homeowners may also download a Complaint Form from the Attorney General’s website at www.ag.state.mn.us and mail the completed form to the Attorney General’s Office at: 1400 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101-2131.

“Meredian targeted homeowners struggling in the troubled economy who were looking to get out of an adjustable rate mortgage, or lower their interest rate by refinancing,” said Attorney General Swanson. “The company masqueraded as the homeowner’s current lender and convinced them to pay thousands of dollars in fees, but left homeowners with the short end of the stick.”

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Allison Tussey

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4 responses to California Loan Mod Company Sued in Minnesota

  1. Meredian contacted Minnesota homeowners and pretended to be their current mortgage company in order to gain their trust, then extracted thousands of dollars in fees for refinancing services that it did not deliver.
    ___________
    Steven

  2. I NEED TO KNOW SOME THINGS ABOUT INTEREST RATES OR APR’S.
    1. DO BANKS AND LOAN COMPANIES HAVE TO FOLLOW THE RATES SET BY THE GOVERNMENT?
    IN OTHER WORDS IF THEY ARE SET AT 4.9% CAN A LOAN COMPANY CHARGE YOU 14% RATE?
    AT ONE POINT GREENSPAN HAD LOWERED THEM A COUPLE OF TIMES SO POPLE WOULD BE ENCOURAGED TO BY HOMES.

    2. IF YOUR LOAN IS SOLD TO ANOTHER COMPANY IS THE BORROWER SUPPOSED TO BE NOTIFIED IN WRITING?

    3. IF YOU BORROW A SMALL AMOUNT OF MONEY FROM THE NEW HOLDERS OF YOUR MORTGAGE. CAN THE NEW COMPANY THAT BOUGHT YOUR MORTGAGE REWRITE THE TERMS OF THE OLD CONTRACT?

    4. CAN THEY CHARGE YOU FOR THINGS THAT YOU PAID FOR IN THE ORIGINAL CONTRACT?

    5. CAN THEY CHANGE THE APR.?

    6. NOT INCLUDE THINGS IN NEW CONTRACT THAT WERE IN ORIGINAL CONTRACT?

    7.INCREASE THE NUMBER OF YEARS LEFT ON
    LOAN?

    8. NOT INCLUDING THE CO-SIGNERS NAME ON THE REWRITTEN AGREEMENT?

    THE ORIGINAL LOAN WAS MADE IN OCTOBER OF 1998. WITH NATIONS CREDIT COMPANY FOR 21,000 AND A 10. SOMETHING APR. I HAVE’NT BEEN ABLE TO FIND ANY PAPERS INDICATING WHAT YEAR AND MONTH IT WAS SOLD TO AMERICAN GENERAL FINANCE COMPANY. BUT I HAVE FOUND DOCUMENTS OF A LOAN THAT SHE WAS GIVEN IN DEC. 2000 BY THEM.

    I BELIEVE THAT LOAN OFFICERS FROM BOTH OF THESE COMPANIES. TOOK ADVANTAGE OF A ELDERLY BLACK WOMAN WHO WALKED WITH A CANE,EACH TIME!

    IS IT LEGAL FOR THE NEW COMPANY TO ELIMINATE THE PAYMENTS SHE MADE SINCE DEC. 1998 UNTIL DEC.21,2000 WHEN SHE BORROWED 1300?

    THANK YOU I NEED ANSWERS QUICK!

  3. AMERICAN GENERAL CONSUMER IN ROSLYN,PA. ARE BIG FRAUDS. THEY TAKE ADVANTAGE OF THE ELDERLY. THEY HAVE THEM PUT SIGN THEIR HOMES OVER FOR LOANS. THEY GIVE PEOPLE WHO ARE 71 YEARS OLD 30 YEAR MORTGAGES WITH HIGH INTEREST CHARGES. THEY ASK FOR NO CO-SIGNERS.OR DO THEY HAVE THEM TAKE OUT LIFE OR DISABILITY INSURANCE TO GUARANTEE SO IF IN THE EVENT SOMETHING HAPPENS TO THE BORROWER THEY WOULD GET THEIR MONEY BACK. WHAT THEY DO IS TAKE THE PERSONS HOME WHEN THAT PERSON DIES.

  4. my mother who was 71 was a victim of predatory lending.we found out about the loan after she passed away in 2008. This company took advantage of my mother. I need to know how can i sue this company on her behalf.? i feel that i should be able to do something to this company since i have the responsibility of paying off the loan now. they are trying to foreclose on the house. i never even knew about the loan until a year later. please tell me what to do. this is a home that i grew up in!my mother who was a single parent worked 3 jobs just so we could have a roof over our heads.so please help me!

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