Colorado AG: Mortgage Broker Misrepresented Loan Terms, Inflated Borrower Income Levels, Worked With Appraisers To Create Inflated Home Values

In Colorado Springs, Colorado, The Gazette reports:

• A Colorado Springs mortgage company and two of its officials have been sued by the Colorado Attorney General’s office for misrepresenting the interest rates, monthly payments and other terms of loans they made, many of which ended up in foreclosure. The lawsuit, [...] alleges that 84 of the 192 loans made by April Bigler, the top loan originator for Alternative Lending of Colorado, [...] ended up in foreclosure because she led borrowers to believe they were taking out a fixed-rate loan and instead found later they had gotten two variable-rate loans with much higher interest rates and monthly payments than they expected.(1)

***

• The lawsuit also names James W. Dale III, 64, also of Pueblo West and who is managing general partner of Alternative Lending of Colorado, as a defendant for failing to enforce the company’s policies or discipline Bigler for violating them. The civil lawsuit charges Bigler with 15 violations of Colorado consumer protection laws, Dale with nine such violations and the company with four violations, and seeks fines of up to $10,000 per violation and restitution to all victims of the alleged scheme.

For the story, see State sues mortgage lenders alleging misrepresentation.

For the Colorado AG press release, see Attorney General announces lawsuit against Colorado Springs mortgage company engaged in deceptive trade practices.

For the Colorado AG lawsuit, see State of Colorado v. Independence Planning LLLP, et al.

(1) According to the story, Bigler, 29, also failed to tell borrowers that their loan payments didn’t include property tax and insurance costs, repeatedly delayed closings to leave borrowers with few alternatives to the loans she arranged, inflated borrowers’ incomes on loan applications and worked with appraisers to inflate the value of homes being mortgaged, the lawsuit alleges. As a result, borrowers ended up with loans they could not afford, according to the lawsuit.