LendingTree, a national online mortgage broker, is paying a $3 million penalty for failing to comply with state law requiring all mortgage lenders to make the appropriate disclosures to potential customers.
In September 2008, Fourteenth Circuit Solicitor Duffie Stone, along with the other chief prosecutors of the state, sued LendingTree to enforce state law and stop their unfair business practices. Immediately after the suit was filed, the online mortgage broker changed language on its website to comply with state law. This week, LendingTree began making payments on the statutory penalty associated with those practices.
“Thousands of South Carolina homeowners are losing their homes to foreclosure,” Stone said. “In these difficult economic times, the very least consumers should expect is that the people making money off of these mortgages are following the law. In the case of LendingTree, they were not.”
State law requires all mortgage brokers to disclose that they are the agent of the borrower. Additionally, they must disclose all material facts and give a good faith estimate of any fees the broker receives, whether from the lender or borrower. Prior to the suit, LendingTree was not making these disclosures.
The Charlotte-based mortgage broker will pay the five counties of the Fourteenth Circuit a total of $163,376 that will be divided up among the counties based on the number of mortgages closed. Beaufort County will receive $132,335.
“Most importantly, LendingTree now has to live up to its fiduciary responsibility that state law mandates and our citizens deserve,” Stone said.
