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Mar 18, 2008 1:52 pm US/Pacific
Attorney General Shuts Down 7 Lending Companies
LOS ANGELES
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Attorney General Jerry Brown said he will bring action against other lenders and consultants who are allegedly violating the law.
CBS 5
The state Attorney General's Office Tuesday shut down six lending companies that allegedly pushed homeowners into "illegal and unconscionable loans."
In a lawsuit filed Monday under seal in Los Angeles Superior Court, the California Attorney General's Office alleges that Lifetime Financial, Nations Mortgage, Greenleaf Lending, Virtual Escrow, Olympic Escrow and Direct Credit Solutions used "bait-and-switch" tactics to victimize thousands of consumers, many of whom lost their homes.
"As the mortgage crisis worsens, a growing number of fly-by-night companies are employing utterly brazen tactics to push homeowners into illegal and unconscionable loans," Attorney General Jerry Brown said. "The illegal sales practices of these companies ... included psychological pressure, forgery and outright lies."
The companies' real estate and bank accounts were frozen at Brown's request. The freeze order also includes expensive cars and millions of dollars in private real estate.
Brown, who is also is asking for $20 million in penalties and restitution, said he expects to bring civil and criminal action against other lenders and foreclosure consultants who are also allegedly violating the law.
(© 2008 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)
