In August, the Consumer Financial Protection Bureau (CFPB) ordered Amerisave
Mortgage Corporation to pay sanctions for its conduct in illegal bait-and-switch
lending schemes that cost borrowers millions of dollars.
The Bureau discovered the Atlanta-based nationwide online lender, its subsidiary,
Novo Appraisal Management Company, and the proprietor of both companies,
Patrick Markert, had been enticing customers with deceptive interest rates,
locking borrowers in with expensive upfront fees, failing to honor the
promised rates, and then fleecing customers with affiliated "third-party" services.
The CFPB's action brings to an end Amerisave's fraudulent operations
conducted between mid-2011 and 2014. The company posted online banner
ads through third-party websites proclaiming false interest rates and
terms to attract consumers. Regardless of the credit score entered by
the consumer on the third-party site, when redirected to Amerisave's
site, the consumer was given a rate quote based on a FICO score of 800,
therefore giving consumers a "too good to be true" quote.
Amerisave would then trap borrowers by requiring them to order and authorize
payment for an appraisal, which would be referred to Amerisave's affiliate,
Novo, prior to providing a Good Faith Estimate for the mortgage. Additionally,
borrowers would be blind-sided at closing with charges for services by
Novo Appraisal Management Company that had been marked up by as much as
900 percent. Amerisave further violated consumer trust by describing their
offerings with the undisclosed affiliate, Novo, as a "special deal."
At the conclusion of its investigation, the CFPB determined that Amerisave
was guilty of the following mortgage bad faith lending practices:
- Purposely and fraudulently promoting low interest rates that were not available
- Trapping borrowers with exorbitant fees prior to supplying them with a
good faith estimate
- Failing to inform consumers of its partnership with Novo
- Charging excessive fees for services provided by its subsidiary, Novo
Consumer Financial Protection Bureau Sanctions
By virtue of the Dodd-Frank Wall Street Reform and Consumer Protection
Act, the Bureau has the jurisdiction to enforce sanctions against companies
participating in unscrupulous, fraudulent, or malevolent practices. The
CFPB has mandated that Amerisave, Novo, and Markert adhere to the following
- The companies are required to pay $14.8 million to reimburse swindled borrowers.
- The companies are prohibited from advertising unattainable mortgage rates.
- Amerisave is prohibited from charging fees or making referrals to its subsidiaries
without the appropriate disclosure forms.
- Amerisave must pay $4.5 million, and Patrick Markert must pay $1.5 million
in penalties to the CFPB's Civil Penalty Fund
Contact National Consumer Protection Lawyers
If you have been a victim of bad faith lending practices, contact Golomb
& Honik for a free case evaluation. Our national consumer protection
lawyers have successfully pursued class action cases against banks, finance
companies, and insurance companies.
To learn more about your legal options or to schedule a free consultation call the
Philadelphia class action lawyers at Golomb & Honik today at
1-800-355-3300 or 1-215-985-9177 or fill out our confidential
The national class action lawyers at Golomb & Honik have successfully
represented individuals in Philadelphia, Pennsylvania, New Jersey, and
throughout the United States.