State calls direct-mail campaign misleading
April 5, 2004
The state’s top mortgage regulator last week continued his crackdown on this industry, targeting a direct-mail campaign that he called misleading.
Scott Bice, commissioner of the Nevada Mortgage Lending Division, said he issued a cease-and-desist order to Federal Mortgage Funding, which has offices in Salt Lake City and Chicago.
Bice said the company, which also operates as Utah Financial Inc., used a direct-mail pitch to state residents that attempted to convince them to apply for a loan secured by their real estate.
The state said, too, that Federal Mortgage Lending’s advertising used a simulated check micro-encoding and other marks intended to confuse consumers into believing that it was negotiable.
“Under Nevada law, all mortgagerelated advertisements must have the division’s approval prior to distribution to protect consumers from misleading or false advertising and promotion of a business,” the mortgage commissioner said in a prepared statement.
Federal Mortgage Lending agreed to cease unlicensed activity in the state and pay $5,000 in investigative costs and attorney’s fees.
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Also last week, Bice said he issued cease-and-desist orders against two Las Vegas-area mortgage lenders Cornerstone Mortgage and Star Funding for failure to properly license branch offices and mortgage agents.
Both companies agreed to meet licensing requirements and paid the state for its investigative and legal costs.
The office headed by Bice the first to focus on the mortgage business was created by the Legislature last year.
Previously, oversight of mortgage lenders had been the responsibility of the state’s Financial Institutions Division.
In recent weeks, Bice has said he views unlicensed mortgage firms and mortgage brokers as a threat to consumers, and he’s promised that a crackdown will continue.
The effort, he said, is beginning to draw calls from the public and well as mortgage professionals, seeking to learn if mortgage firms are licensed.
“It is of paramount importance for our agency to be accessible and proactive in order to escort unlicensed or misleading operators out of Nevada,” Bice said.