CHICAGO – The Illinois Department of Financial and Professional Regulation (IDFPR) today filed an order fining Mortgage & Investment Consulting (MIC), based in St. Paul, Minn., $200,000 for multiple violations of the Illinois Residential Mortgage License Act. IDFPR has also denied the company’s application for licenses for three branches, two of which had been operating without a license in Illinois.
Investigators from the Mortgage Fraud Task Force of IDPFR examined dozens of mortgage files created under the corporate license of MIC, but without the appropriate, additional state licenses required to operate each branch office. Almost half of those loans failed to comply with basic consumer protection requirements.
“With so many families seeking to restructure their mortgages, it is imperative that every loan offered by a licensed mortgage company provide the consumer protections adopted by both state and federal lawmakers in recent years,” said Brent Adams, Acting Secretary of Financial and Professional Regulation. “Companies that fail to do so will be held accountable on behalf of their customers.”
IDFPR examiners reviewed 88 loans. Eleven of the examined loans showed that the borrower had a total debt/income ratio exceeding 50%. Recent experience has shown that such a high debt to income ratio frequently leads to foreclosure and Illinois laws have recently been amended to prohibit loans when the Illinois licensed mortgage company cannot verify the borrower’s reasonable ability to repay the loan.
Dozens of violations were found affecting borrowers’ meaningful choices to close loans with MIC or seek other mortgage providers, including: failure to provide disclosure information about the brokerage services offered and fees associated with mortgages, changes in the interest rate or other loan terms that were not disclosed to customers during the mortgage processing, and failing to obtain information to ensure that the prospective mortgage holder could actually afford the loan. In summary, IDFPR examiners found 19 different serious violations among the 88 loans examined by IDFPR.