Florida Borrowers Say Colorado Mortgage Company Misled, Defrauded Them

Some consumers in Orange County (Fla.) claim they were misled by a home loan lender offering the cheapest rates in town — rates too cheap to be believed.

Those consumers are now turning to the state for help. When a local news reporter went to ask Jeff Johnson about his firm’s full-page newspaper ads, Johnson said, “I’m not here to talk to you.”

His ads offered incredible mortgage rates as low as 1-3 percent. But consumers say to read the fine print.

“It’s past risky,” said Tom Long, who canceled his application after he says Mortgage Planning and Loan Specialists, a Colorado mortgage lender that has set up shop in Florida, would not answer basic questions. “(It’s) dangerous.”

One man interviewed was stunned by the first payment notice.

“I felt pretty foolish, and I was also pretty angry,” he said.

The company’s initial disclosure statement shows the man’s home loan would have an interest rate just above 3 percent, while his monthly payment would have been about $1,400. Instead, his actual interest rate is more than 8 percent and his monthly home mortgage payment neared $3,000.

The company told him its ads offer payment rates, not interest rates, so consumers actually make a partial Florida home loan payment each month. What you don’t pay is added on to your principal — a process known as negative amortization. It entails great risk and this consumer claims in a complaint to the state was initially hidden, then glossed over during the closing.

“They misrepresented what they were selling,” said one consumer.

In a response to the state, Mortgage Planning and Loan Specialists wrote its ads meet all federal and state requirements, the nature of the Florida mortgage loan was fully disclosed and no one was offered 1-3 percent interest rates.

But when an investigator called about a mortgage and met with a salesman, that’s exactly what she heard. It’s also what the reporter doing his own investigating was later promised, leading people to believe this was just another case of mortgage fraud, which has increased expotentially of late.

“This 3.25 is that a real interest rate,” stated the reporter.

“To my knowledge, sir, yes,” the salesman replied.

One consumer says that tactic would cost him $60,000 in extra fees and payments.

The Florida Department of Financial Services is investigating four complaints against Mortgage Planning and Loan Specialists. The mortgage company has since offered to refinance, at no charge the loan of the consumer who wanted to remain anonymous, and it says it has received only a handful of complaints about its loans.