CHICAGO (CN) – Hartland Mortgage Centers targeted old people by claiming its reverse mortgage loans were a “time sensitive” government program, part of the 2009 stimulus package for senior citizens, Attorney General Lisa Madigan says. Madigan says Hartland scammed old timers with mailers that stated, “President Obama’s Stimulus Plan Helps Seniors,” to push its home equity conversion mortgage loans, which actually have been around since 1989.
Madigan says Hartland has been sending misleading letters to consumers since July 2009, stating that “(t)he stimulus package signed into law by President Obama authorized an increase in the Home Equity Conversion Mortgage Loan limit to $625,000 through 12/31/09 to help seniors.” The letter cites a bogus “Expiration Date: July 17, 2009,” though HECM loans have been available since 1989 and will be available beyond the “expiration date.”
In her complaint in Cook County Chancery Court, Madigan says Hartland claimed that homeowners could borrow up to $625,000, though that would be impossible on a HECM loan. And she says Hartland falsely promised that “The United States Congress has authorized a Reverse Lending program you do NOT have to pay back as long as you live in your home.” Madigan calls that a false “blanket promise.” Hartland guaranteed that the homeowner would “always maintain ownership” of the home, when in fact there are situations where a homeowner could face foreclosure, Madigan says.
She says that Hartland tried to falsely claim affiliation with a government agency by titling its return address: “ECONOMIC STIMULUS INFORMATION, Senior Benefits Division.” The solicitation envelopes state: “If you are 62 years of age or older, you may be eligible to take advantage of an important U.S. Government Insured Program,” further perpetrating the false affiliation.
Hartland made other bogus claims, Madigan says, suggesting that consumers would get more money if they take the loan as a lump sum, though consumers would get the same amount, or in some instances more money with the line of credit. But “the lender collects more interest from a larger up front loan balance.”
Madigan has sued California-based American Advisors Group in a similar complaint in Sangamon County Court, Springfield.
Madigan wants an injunction and a $50,000 fine for each violation of the Consumer Fraud and Deceptive Business Practices Act and the Uniform Deceptive Trade Practices Act, and another $10,000 for each violation committed against an elderly person.