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$60 million settlement reached

Friday, March 22, 2002 | 10:09 a.m.

WASHINGTON -- A California mortgage company accused of deceiving poor and elderly homeowners into taking out loans with large hidden fees has agreed to a $60 million deal to settle federal and state charges.

The Federal Trade Commission announced Thursday that First Alliance Mortgage Corp. agreed to repay nearly 18,000 of its customers in 18 states and the District of Columbia.

Borrowers who obtained First Alliance loans from 1992 through March 23, 2000, and who have not previously settled with the company, would be eligible for refunds under the agreement. The average consumer would get about $3,000.

In October 2000, the FTC accused First Alliance of deceiving consumers into believing they were borrowing money with no fees. The company allegedly didn't tell customers about fees that amounted to up to one quarter of the total loan and misled borrowers about interest rate increases and monthly payments, the agency said.

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