DENVER — Colorado Attorney General John Suthers announced today that his office, in conjunction with the Florida Attorney General’s office, has reached an agreement to prevent an Englewood-based brokerage firm, Assurity Financial Services, LLC, from engaging in deceptive trade practices. The agreement is the latest in a series of actions the Office of the Attorney General has taken to combat deceptive mortgage advertising.
According to the agreement, Assurity Financial Services was contacting consumers with direct mailings designed to look like they were from a government agency or the borrower’s lender. According to the assurance of voluntary compliance, Assurity Financial Services sent out hundreds of thousands of mailings that appeared to be materials from the U.S. Department of Housing and Urban Development, the U.S. Department of Veterans Affairs or other governmental entities. The mailers, which used a Washington, D.C., P.O. Box as a return address, informed homeowners in Colorado, Florida and other states that they were eligible for refunds on their mortgages.
Other mailers from the Englewood firm were made to appear as though there were from the homeowner’s lender or implied that the homeowner was delinquent on their mortgage when, in fact, the homeowner was not. When consumers used the phone number listed on the mailers, they were directed to operators working for Assurity Financial Services who were trying to solicit business.
These actions, the attorneys general alleged, violated the Colorado Consumer Protection Act and the Florida Deceptive and Unfair Trade Practices Act.
Under the assurance of voluntary compliance, Assurity Financial Services has agreed not to engage in any false or deceptive trade practices and will be required to clearly label each mailer as “a solicitation for a home loan.” Also as part of the agreement, Assurity Financial Services will pay $100,000 each to Colorado and Florida to reimburse the cost of their investigations.
Since taking office in 2005, Suthers and the Office of the Attorney General have worked to crack down on deceptive mortgage advertising and rescue firms who claim that they can help borrowers avoid foreclosure. Last year, for example, the Attorney General announced settlements and actions against several mortgage brokers who had placed advertisements in the Mortgage Marketplace advertising sections of the Denver Post and Rocky Mountain News. The advertising at issue in those cases emphasized “fixed” teaser rates, which were actually variable rates that adjusted monthly.
The Attorney General has also been active in cracking down on foreclosure rescue firms and loan modification companies that use official looking solicitations in order to catch the eye of borrowers who are looking for help on a loan default. Since 2005 the Attorney General has entered into seventeen cease and desist notices or assurances with foreclosure rescue firms and six loan modification firms who offer these “negotiation” services. Some of these firms used official looking solicitations to convince customers that they could help negotiate down on their mortgages.