An Ohio-based mortgage banker has agreed to settle Federal Trade Commission charges that it provided false and misleading information about payment schedules and the cost of credit to mortgage applicants, in violation of federal laws. Progressive Mortgage Corporation and its President, Sanford Cramer, will be barred from the misrepresentations in the future and required to provide full and accurate disclosure of finance charges, annual percentage rates and other terms and conditions of financing, in compliance with the Truth in Lending Act (TILA).
Progressive is headquartered in Cleveland, Ohio, and does business in a 14 county region.
According to the complaint detailing the FTC charges, Progressive did not include the entire cost of required mortgage insurance in determining the finance charge and annual percentage rates of loans and therefore understated the annual percentage rate and finance charge to consumers. In addition, other disclosures required by the TILA, including the annual percentage rate, the finance charge, the monthly payment amount and the total of payments were misrepresented, according to the FTC.
The agreement to settle the charges will bar Progressive and Cramer from misrepresenting any term or condition of financing in the future. Specifically, Cramer will be barred from misrepresenting:
- the annual percentage rate and finance charge of consumer loans;
- the number, amount, and timing of mortgage payments; and
- the total number of payments to repay consumer loans.
NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $10,000.
Copies of the complaint, consent and an analysis to assist in public comment are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 202- 326-2502. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov
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(FTC File No. 932 3143)