New York Department of Financial Services Announces Settlement with Unlicensed Mortgage Lender

On January 10, 2020, the New York Department of Financial Services (DFS) announced that, in concert with the New York Attorney General (New York AG), it had entered into a consent order and settlement with an unlicensed mortgage-lending business to resolve allegations that the business illegally made predatory, subprime loans in violation of the Consumer Financial Protection Act (CFPA), 12 U.S.C. § 1601 et seq., the Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq., Regulation Z, 12 C.F.R. § 1026 et seq., and various provisions of New York state law.

According to DFS, the defendant engaged in unlicensed mortgage lending and disguised seller-financed loans as lease agreements with an option to purchase. The settlement follows a previous settlement with the defendant’s former investor for involvement in the alleged scheme.

The settlement provides for $600,000 in consumer restitution and the transfer to consumers of 58 properties with an estimated value of over $3,000,000 with no future payment obligations. The settlement also prohibits the defendant from operating its business in New York State, terminates any residential property agreements, requires the defendant to sell any remaining New York located properties and to ​cooperate with any further investigation by the New York authorities.

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