Consumers Allege Florida Mortgage Company Misled Them With Offers of Low Rates
Some consumers in Orange County (Fla.) claim they were knowingly misled and cheated by a Florida mortgage company that offered the cheapest rates in town.
Those consumers are now turning to the state for help.
When a local TV news reporter went to confront Jeff Johnson about his company’s full page newspaper ads, Johnson said, “I’m not here to talk to you.”
His ads offered incredible Florida mortgage deals with rates as low as 1-3 percent. But consumers say to read the fine print.
“It’s past risky,” said Tom Long, who canceled his application after he says Mortgage Planning and Loan Specialists of Colorado, that has a Metrowest office here in Florida, would not offer an answer to basic questions. “(It’s) dangerous.”
An Orange County man, who wants to remain anonymous, did get a Florida home loan. He says he then was stunned by the first payment notice.
“I felt pretty foolish, and I was also pretty angry,” he said.
The company’s initial disclosure statement shows the man’s Florida mortgage loan would have an interest rate just above 3 percent, while his monthly payments would have come in around $1,400. Instead, his actual interest rate is more than 8 percent and his monthly charges approached $3,000.
The company told him and later told Action 9, its ads offer payment rates, not interest rates, so consumers actually make a partial Florida home loan payment each month. What you don’t pay is added on to your principal. It’s called negative amortization.
It’s a risky loan this consumer claims in a complaint to the state was initially hidden, then glossed over during the closing process.
“They misrepresented what they were selling,” said one consumer.
In a response to the state, Mortgage Planning and Loan Specialists wrote its ads meet all federal and state requirements, the nature of the Florida home mortgage loan was fully disclosed and no one was offered 1-3 percent interest rates.
But when an investigator called about a mortgage and met with a salesman, that’s exactly what she heard. It’s also what the TV reporter was later promised.
The reporter asked, “This 3.25 is that a real interest rate?”
The salesman answered, “To my knowledge sir, yes.”
One consumer says that tactic would cost him $60,000 in extra fees and payments.
“At some point you have to trust somebody and I made the mistake of trusting these guys,” he said.
The Florida state finance office is investigating four complaints against Mortgage Planning and Loan Specialists. The mortgage company has since offered to refinance at no charge the loan of the consumer who wanted to remain anonymous, and it says there have been only been a handful of complaints out of hundreds of Florida home loan transactions.
