Mortgage Bank Shut Down, To Make $1.1 Million In Restitution
Attorney General Spitzer and Superintendent of Banks Elizabeth McCaul today announced that a Rockland County mortgage banker has permanently surrendered its license to do business in New York and will make $1.1 million in restitution to settle charges involving a mortgage scam.
Over the past three years, Anvil Mortgage Bank, Ltd., and its principal, Eric Kotch, held "home buying seminars" in Queens, Brooklyn, Manhattan, Yonkers, and Uniondale, charging first-time home buyers $500 with the promise that they would obtain a mortgage loan.
Anvil's pitch claimed the approval would be made despite 'credit problems, past bankruptcies, and limited down payment funds.' Some 15,000 area residents paid the fees, yet fewer than 450 actually received loans. (See attached)
"Anvil preyed on people's desire to own a piece of the American Dream, and instead of helping them buy a home, the company left them with empty promises, broken dreams and out $500," said Spitzer. "Consumers can easily avoid being victimized - information on cleaning up credit histories, saving for a down payment, and getting a mortgage are readily available for free from any number of non-profit community groups."
"Governor Pataki has led the charge to end abusive lending practices," said McCaul. "On behalf of New York state's consumers we are sending a very strong and clear message - we will not tolerate abusive or deceptive lending practices. Let this be a signal to predators ready to pounce on their next victim, we are committed to safeguarding the American dream of home ownership."
In a series of meetings over the past year with the Banking Department, Kotch made repeated assurances that the company would change its advertising and lending practices. When Anvil continued to mislead consumers, the Department issued a notice of hearing for license revocation and suspended Anvil's license in February.
Since last summer, Spitzer's office had a parallel investigation underway into Anvil's practices. Last month, the Attorney General filed suit against Anvil, winning a court order freezing approximately $720,000 in the firm's bank accounts and blocking it from accepting any additional mortgage application fees. The lawsuit charged that Anvil's advertisements and representations made at seminars were false and deceptive.
Also taking part in the news conference were Annette Brown of Manhattan and Aila Benitez of Brooklyn, both of whom lost money to Anvil.
Both Spitzer and McCaul commended the spirit of cooperation between their offices that resulted in such a successful outcome to the case.
Justice Carol H. Arber of Manhattan Supreme Court approved the order that permanently puts Anvil and Kotch out of the mortgage banking business in New York State and requires them to pay the $1.1 million for refunds.
As part of the settlement, Anvil has turned over its customer lists to the Attorney General's office. Anvil consumers who are eligible for refunds will be contacted by representatives of Spitzer's office by May.
The case was handled by Assistant Attorneys General Amy J. Mayer and Stacey Cumberbatch of the Consumer Frauds and Protection Bureau. Barbara Kent, Director of Consumer Affairs and Financial Products, and Alvin Narin, Assistant Counsel, handled the case for the State Banking Department.