Oregon’s Department of Consumer and Business Services issued cease-and-desist orders and fines against four mortgage companies for violating Oregon’s mortgage lending laws, and is looking into the actions of 60 other firms.
It was not immediately known if any Central Oregon lenders are on that list of 60 companies.
The DCB also revoked the licenses of Springfield-based Allegiance Mortgage and Tigard-based Diamond Financial Mortgage, and took action against 1st American Incorporated of Portland and Pacific Crest Funding of Eugene.
1st American received a cease and desist order for unethical lending practices after investigators discovered inaccuracies from loan reports in company records, and Pacific Crest was reprimanded for not requiring all of its loan originators to complete state-mandated training.
Allegiance Mortgage also faces a $50,000 fine for allowing employees to provide false information on mortgage loan applications.
“Investigating complaints and taking enforcement actions when necessary are important ways we protect borrowers and prevent fraud in the mortgage market,” said David Tatman, administrator of the department’s Division of Finance and Corporate Securities. “These cases show there are strong consequences when mortgage companies engage in deceptive or fraudulent practices and supervisors don’t diligently oversee their employees.”
So far in 2008, the state has revoked five mortgage lending licenses, issued 30 enforcement orders and has more than 60 mortgage lending investigations are under way.
Mortgage lending companies across Oregon, and the nation, are feeling the heat as the housing market implodes and millions of people who took out high-risk loans find themselves wishing they hadn’t taken that risk.
Many lenders and borrowers say they assumed that housing prices would keep going up, but when they didn’t borrowers found themselves owing more money than their homes were worth. That led to defaults, the housing collapse and calls for the federal government to bail out lenders and borrowers.
Congress has responded with billions of dollars in direct aid and loan guarantees.
