ATTORNEY GENERAL’S OFFICE SETTLES WITH MORTGAGE LENDERS WHO TRIED TO MAKE REFINANCING BORROWERS PAY OFF THEIR LOANS TWICE

Attorney General J. Joseph Curran, Jr. announced today that his Consumer Protection Division has reached a settlement with Alan B. Furman, Ethel Furman, Arthur Furman and Suzanne Furman (“the Furmans”), mortgage lenders who live in Rockville, Maryland, and Palm Beach, Florida.

The Furmans made mortgage loans to Maryland consumers through a mortgage servicing company called Financial Express, which is no longer in business. Beginning in 1999, Financial Express allegedly failed to forward to the Furmans more than $2.5 million in pay-off amounts it received from consumers who had refinanced their loans with other mortgage companies. When the Furmans were unable to recover their money from Financial Express, the Furmans filed 30 different lawsuits against the consumers whose mortgage pay-off amounts had been diverted by Financial Express. The lawsuits alleged that consumers should have made their mortgage payments directly to the Furmans, and not the servicer.

The Division alleged that consumers paid off their mortgages when they sent their payments to the mortgage servicer and that the Furmans violated the Consumer Protection Act by seeking to collect payments from consumers who had already paid off their mortgages. Under the settlement, the Furmans denied the Division’s allegations, but agreed to reimburse consumers for any legal fees they incurred defending the lawsuits and to return any settlement payments they received from consumers. The Furmans also agreed to cease all attempts to collect any monies from consumers that were already paid to the Furmans’ mortgage servicer, to provide consumers who paid off their mortgage loans with suitable lien releases, and to not make loans to consumers unless they possess the required license.

" I am pleased that we were able to get restitution for consumers in this case," Attorney General Curran said. "These consumers had paid off their mortgages and the lender should not have sought to collect again from them.”

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