On July 28, the North Carolina Attorney General announced that it obtained a default judgment against a mortgage broker and its president in North Carolina Superior Court. The Attorney General brought claims against the defendants under the North Carolina Unfair and Deceptive Trade Practices Act, N.C. Gen. Stat. § 75-1.1. The Attorney General alleged that the president promised consumers that he would refinance their property in exchange for a fee of about one percent of their mortgage, and requested additional appraisal and other fees. After defendants received the upfront fees from consumers, they would cease contact with consumers and never refinanced the mortgages.
The defendants were ordered to pay $20,940 in restitution to consumers, restore all consumer property, and cancel all consumer contracts. Defendants were further ordered to pay a civil penalty of $5,000 per violation to the State of North Carolina, totaling $90,000.