Meredian Financial Corp., a Costa Mesa, Calif.-based mortgage lender and broker, is being sued by Minnesota attorney general Lori Swanson for charging state homeowners thousands of dollars to refinance their mortgages without actually providing consumers the promised services.
"Meredian targeted homeowners struggling in the troubled economy who were looking to get out of an adjustable rate mortgage, or lower their interest rate by refinancing," Swanson said. "The company masqueraded as the homeowner's current lender and convinced them to pay thousands of dollars in fees, but left homeowners with the short end of the stick."
According to the lawsuit, the company contacted homeowners pretending to be their current mortgage company to gain their trust. In an attempt to get the homeowner to pay up-front fees, Meridian employees allegedly provided mortgagors with false representations about low fixed rates, no out-of-pocket expenses, and no appraisal requirement loans.
Investigators say Meridian falsely represented that these fees, which ranged from $1,000 to $4,000, would be refunded at the closing that took place within 30 to 45 days.
The lawsuit said that after acquiring the up-front fees from the homeowners, the company would stop working on the loan file by using excuses such as asking the homeowner for documents that were already provided or were irrelevant to the refinance and changing the terms of the refinance by issuing higher interest rates and fees.
A representative answering the company's telephone said the office is now closed. The firm's lawyer Michael Jay Berger could not be reached for comment.
